What is a Structured Settlement... and How Can I Exchange the Periodic Payments I'm Receiving for a Lump Sum of Cash Right Now?
If you were the plaintiff in a personal injury suit, you may have received and accepted an offer from the defendant's attorney to 'settle' for periodic payments over a number of years instead of a lump sum settlement. This is what is called a "structured settlement". Structured settlements can provide you with a predictable and steady stream of income over a period of time which can vary from a few years to a lifetime.
Other examples of structured settlements include mortgages that you have taken back as a seller, retirement pension annuities, lottery winnings that payout over many years, and so forth.
Why Should I Opt for a Lump Sum Payment Today When I Can Receive More Money In the Long Run By Continuing to Receive Payments?
One problem with long term structured settlements is that the buying power of a fixed amount of money tends to decrease over the years. This means that if you are receiving $20,000 a year today, that ten years from now that $20,000 might only be worth $10,000 in terms of purchasing power.
Furthermore, your needs for cash are often the greatest RIGHT NOW... and ten or fifteen years from now, when you've made most of your major purchases, your need for cash will typically have greatly diminished.
Another reason for taking cash now instead of waiting for payments is being able to make a profitable investment. This is particularly true if the economy is in a slump and you are able to buy collectibles or real estate for cents on the dollar.
Another excellent reason for opting for a lump sum cash settlement is to payoff high interest credit card debt. |
