If you’ve got a structured settlement, you may have been approached to sell it for a lump sum of cash now. Or, you may have seen a TV ad that has convinced you that a bird in the hand is better than two in the bush, so to speak. But is selling a structured settlement for quick cash now truly a good idea? Before you proceed, there are some hard questions you’ve got to ask yourself.
Essential Question #1: Do I absolutely need this money right now? This is probably the most crucial question to ask. Whenever you sell a structured settlement, no matter how good a deal you’re offered, you will get less in total than you would have gotten over time. Companies that buy structured settlements are in business to make a profit. Their goal is to collect more over time than they paid to you, and the better they are at making money, the slicker their ads.
So, selling your structured settlement is never going to make you a profit. But if you’re facing a financial emergency, a speedy cash infusion could make this the right option for you. To determine whether you really need this money right now, ask yourself:
Is this truly an emergency? It’s easy say to “Yes!” to this question, but really think it through. A life-or-death situation is certainly an emergency. Bills coming due? Car repairs? Maybe not. You may be able to put off your “emergency” longer than you realize.
Will the amount I get from selling my settlement take care of this emergency in full? Is this a one-time deal, or a recurring problem? Will the money you get from your settlement cover the entire amount? Once you sell your settlement, it’s gone – then what? If money problems are habitual for you, it’s time to find the root cause (Too many credit cards? Spendthrift spouse? Substance abuse?) and deal with it now.
Is selling my structured settlement the only way to deal with this emergency? There may be other options. If you’re late on monthly bills like credit cards, talk to your lender and try to work it out until your next settlement payment comes, or check into credit counseling. If you own your home, a home equity loan or reverse mortgage might be a better way to access cash. If you have retirement accounts, like a 401(k), 403(b), or IRA, you might be able to draw some of the money out or take a loan against the balance. And although you might have to swallow your pride, don’t overlook public assistance. Utility, cell phone, and cable providers often provide hardship waivers or reduced-price services. Government and nonprofit organizations can provide help with basic necessities. Maybe even friends or family can help – just be sure to pay them back. The goal is to get you through to the next payment.
When you sell a structured settlement, you are selling a piece of your financial future. So, if you’ve answered essential question #1 and decided it’s still the way to go, it’s time to ask yourself the next essential question. We’ll get to that next time.
If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.
