Cash Lump Sum
Many times people who are receiving regular payments from a structured settlement would prefer a cash lump sum instead. However the legal and regulatory system is set up to discourage this action being taken, both from a set of restrictions and with the use of tax treatments that discourage selling a structured settlement.
However we are all individuals in this country, and a one-size fits all mentality is not in our culture, and is not always desirable or necessary. Another point is that typically a structured settlement annuity is set up for a long time, sometimes for decades, and peoples' individual circumstance can vary widely over a short time, never mind over twenty five years. Think of your own situation, and what has actually happened over the past say ten years - births, deaths, illness, marriage, divorce, and if you are fortunate, good health.
New opportunities are another reason to look for a cash lump sum, rather than a series of small payments. Sometimes a chance comes up to purchase a business or other investment, which could give a much higher return than that provided by the insurance company paying out the structured settlement monthly payments. The same situation arises if you wish to purchase a home, and get away from the endless monthly rent payments. If you are receiving a low monthly annuity, it may be difficult to save for the down payment for a mortgage, and a lump sum may be just what you need to get involved as an owner instead of as a renter. If you already own a home, then occasionally meeting the monthly mortgage commitments may have been difficult due to a number of reasons such as ill health or job loss, and a lump sum of cash could be needed to prevent getting your home repossessed and avoid foreclosure.
One of the most common reasons to want a lump sum is to reduce high levels of consumer debt. It is very easy to get in trouble with consumer credit cards and the banking industry makes it even easier to get in trouble by increasing your credit limit when you get near the limit. Once you have a high balance on your credit card, it becomes more and more difficult to pay it down as a larger part of the monthly payments is to service the debt, which is typically at a crippling rate of over twenty five percent for those whose credit score is on the low side. Obtaining a lump sum to pay off all or part of a structured settlement is a good use of the money, as long as your consumer debt cycle does not repeat itself.
Once you have decided to go ahead, there are a number of steps to go through. Initially get some different quotes or estimates, as the company who will provide the cash in return for the annuity will want to make a profit. As long as that is a fair amount, then you can decide to go ahead, and they will help process the paperwork, which ultimately will need court approval to ensure that the decision is in your best interest. The process of selling a structured settlement is neither quick or easy, but if you have the need for a cash lump sum, then at least it is an option for you.
Many times people who are receiving regular payments from a structured settlement would prefer a cash lump sum instead. However the legal and regulatory system is set up to discourage this action being taken, both from a set of restrictions and with the use of tax treatments that discourage selling a structured settlement.
However we are all individuals in this country, and a one-size fits all mentality is not in our culture, and is not always desirable or necessary. Another point is that typically a structured settlement annuity is set up for a long time, sometimes for decades, and peoples' individual circumstance can vary widely over a short time, never mind over twenty five years. Think of your own situation, and what has actually happened over the past say ten years - births, deaths, illness, marriage, divorce, and if you are fortunate, good health.
New opportunities are another reason to look for a cash lump sum, rather than a series of small payments. Sometimes a chance comes up to purchase a business or other investment, which could give a much higher return than that provided by the insurance company paying out the structured settlement monthly payments. The same situation arises if you wish to purchase a home, and get away from the endless monthly rent payments. If you are receiving a low monthly annuity, it may be difficult to save for the down payment for a mortgage, and a lump sum may be just what you need to get involved as an owner instead of as a renter. If you already own a home, then occasionally meeting the monthly mortgage commitments may have been difficult due to a number of reasons such as ill health or job loss, and a lump sum of cash could be needed to prevent getting your home repossessed and avoid foreclosure.
One of the most common reasons to want a lump sum is to reduce high levels of consumer debt. It is very easy to get in trouble with consumer credit cards and the banking industry makes it even easier to get in trouble by increasing your credit limit when you get near the limit. Once you have a high balance on your credit card, it becomes more and more difficult to pay it down as a larger part of the monthly payments is to service the debt, which is typically at a crippling rate of over twenty five percent for those whose credit score is on the low side. Obtaining a lump sum to pay off all or part of a structured settlement is a good use of the money, as long as your consumer debt cycle does not repeat itself.
Once you have decided to go ahead, there are a number of steps to go through. Initially get some different quotes or estimates, as the company who will provide the cash in return for the annuity will want to make a profit. As long as that is a fair amount, then you can decide to go ahead, and they will help process the paperwork, which ultimately will need court approval to ensure that the decision is in your best interest. The process of selling a structured settlement is neither quick or easy, but if you have the need for a cash lump sum, then at least it is an option for you.