When you settled your lawsuit, won the lottery, or entered into some other structured transaction, it probably seemed like your best option at the time. But now that some time has passed, and life has happened to you, you might be re-thinking the whole thing. Should you sell what you have for quick cash?
First, understand that if you sell your structured settlement, you will receive much less in a lump-sum than you would have collected over time. Still, there may be very good reasons to take your payout.
Expenses. A financial emergency may be pressing on you. You may be facing unemployment, medical bills, foreclosure, or legal troubles that have become unbearable. If the cash you’ll get from selling your structured settlement is enough to cover and take care of the emergency, then cashing out might be a good idea. Paying off a crushing debt load might be a good reason to cash out too – even though you’ll get less in a lump sum than you would have gotten over time, if you’re facing double-digit credit card interest rates, wiping out the balance could be well worth it. Just don’t get yourself back into debt again.
Education. If you or a family member are going (or going back) to school, cash from your settlement can help cover tuition and fees. But before you cash out for this reason, check other sources of financing. Scholarships or government grants are ideal. If that’s not available, check into student loans. If the interest rate on a student loan is lower than the effective interest rate you’re earning on your structured settlement, you’re better off with the loan.
Going Into Business. Maybe you always wanted to start a business, or you may have stumbled upon an irresistible opportunity. Your settlement may provide the cash you need to pounce on that opportunity quick. Before you sell, consider other possibilities for financing the venture, such as a bank loan or a business partner. And check out your new opportunity thoroughly to make sure it isn’t a scam and that the profit potential is there.
Know Thyself. One more thing to consider: what not having the annuity will do to your future finances. Structured settlements are intended to lock in future income. If you’ve won the lottery, you likely don’t want to work the rest of your life. And if you have a settlement as a result of a personal-injury lawsuit, you may not be able to work. What will you do if that income is no longer there? If you are a spendthrift who has trouble managing money, who is prone to impulse buys of toys and trips, think long and hard before cashing in that settlement.
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.
