When To Sell Structured Settlements

2007-03-08 10:33:40

( Financial )



A couple of decades ago injured parties were awarded settlements that were in one lump cash payment. The full amount of the settlement would sometimes be spent with almost nothing left for the future medical needs of the injured person. Another settlement agreement was then designed to resolve this problem. Structured settlement payments refer to payments the injured party will receive in the future instead of one lump sum cash pay out. A structured settlement allows the injured persons to receive scheduled payments within a specified amount of time.

A structured settlement is convenient for both the defendant and the injured person. This arrangement basically guarantees future funds for the injured party: future funds for his medical bills and living expenses. A structured settlement can also be a problem. The funds are regulated by financial backers, often banks and insurance carriers. They adhere to a strict schedule for the future payments. The injured party cannot request a future payment be paid in advance or the amount to be increased at any given time. If the injured party is in dire need of cash, they have the option to sell these future payments in exchange for immediate lump sum of cash.

There are a lot of companies that can accommodate your request should you decide to sell structured settlement that has been awarded to you. These companies advertise they can provide you immediate cash in exchange for your structured settlements.

When you sell structured settlement that has been awarded to you previously, you are giving up guaranteed future payments in exchange for immediate cash. It is convenient for both you and the buying company. You get the remaining reserves from your settlement in one lump cash payment; the company gets the rest of your future payments at a substantial discount because of inflation. Before you sell structured settlement awarded to you, consider the lump sum you are getting, but also consider other hidden fees and taxes that are associated with this transaction.


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