When is it Good to Consider Selling Your Structured Settlements?

The following is a guest post. Enjoy!

Before we go into the selling, let us first get a brief idea about structured settlements. Monetary reimbursements are quite common nowadays in the event of winning a legal case (accidental, occupational or personal) or in any other situation where the plaintiff can be entitled to compensation. Often the plaintiff’s legal counsel or the insurance company that is paying the compensation will recommend the amount to be paid in regular installments throughout a long span of time instead of a large lump sum amount straightaway. This is quite a good strategy as it provides for a regular income source. This modulated and periodic payment of money, either monthly or annually, over a span of around 10 to 20 years, or even in some cases, the rest of the beneficiary’s life, is called structured settlement.

Selling Structured Settlements

Though structured settlements are a good, dependable source of income, there might come up other situations which demand a large sum of money. It could be pending medical bills, hefty bank loans with the interest building up every day or any other kind of emergency. In times like this you can consider your structured settlement as a kind of financial asset. You can find enough buyers in the market to sell it off for a lump sum amount of cash. These buying companies will pay you a large amount of cash in exchange for the regular modulated income of the structured settlement, usually at some discount.

This discount is the percentage by which the amount they are paying you will be less than the total amount of the remaining settlements.

Why to sell?

  • Suppose you have been engaged in a legal battle for years. After fighting for a long time, you do win it and the court gives you compensation in the form of structured settlements. But the legal bills have piled up high, there is already a mortgage on your house and all your savings are depleted. At this time, it would be greatly useful to have a lump sum amount of money in your hands so that you can get rid of all the bills and pay off all the loans and start afresh. You can get that by selling your settlement incomes. You will get YOUR money, IMMEDIATELY.
  • In case of an elderly plaintiff, it is often a more profitable option to sell off your settlement, as, even with the discount, it is possible that you would get more money straightaway, than with all the settlements that you would receive for your remaining life.
  • With the rate of the money going down due to inflation, it is better to sell off your settlement, as whatever monthly amount you are receiving at the moment, might not be worth as much after some years go by.

There are probably more reasons to sell off your settlements, but you should be the best judge of that. Get good legal advice and wisely choose the correct option, be it to sell or not to sell.