Have you recently been awarded a claim as a result of a personal injury case? If so, and if your claim was substantial, then there's a good chance that you'll be receiving your payments in the form of a structured settlement. In other words, rather than receiving one lump-sum payment at once, you'll receive periodic payments over a longer period of time. For some people, however, long-term payouts aren't ideal.
In such cases, it may make more sense to sell your structured settlement as a means of receiving one lump sum immediately. Read on to explore your options as well as the potential pros and cons of each.
Why Would You Want to Sell?
There are many reasons as to why a person may prefer to sell a structured settlement to a third-party rather than continuing to accept long-term payments. By selling a structured settlement and receiving a lump-sum, a person may be able to:
- start a business
- purchase a new home
- pay for tuition to return to school
- cover medical bills
Keep in mind that if you decide to sell a structured settlement, you will first need to obtain approval from a judge; this is done to ensure that the money is used in a responsible manner. For example, your proposal to sell your structured settlement may be denied if you plan on using the money for expensive clothing, electronics, or vacations.
Pros of Selling
There are many advantages that can come along with selling your structured settlement. Not only do you get to enjoy an up-front, lump-sum payment, but you may be able to save money in the long term by doing so.
For instance, if you had been thinking about taking out a home loan but decide to sell your structured settlement and use the money to buy a home with cash instead, you could save tens of thousands in interest down the road.
Potential Cons of Selling
Of course, when you elect to sell a structured settlement, you typically will have to take a bit of a "pay cut," as you won't receive the full settlement amount. Furthermore, you'll be signing away your right to receive continued long-term payments, which can be a bit unnerving for some, especially considering the financial security that can come along with guaranteed long-term payments.
Now that you know a little bit more about selling structured settlements, you'll be in a better position to determine whether or not this option is right for you. If you want to understand the situation more or ask questions, contact a company like My Lump Sum for more help.Share