Should You Sell Your Structured Settlement?

By: Matthew Keegan
Submitted: 2007-01-17 16:16:43
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The courts have just awarded you a settlement in the amount of $1.3 million dollars for injuries you sustained while using the Widget Corporation's product. However, the terms of the settlement require that Widget pay you a small amount right now, with the remaining funds to be dispersed over the next 20 years. This "structured settlement" works fine for some people, but you have medical bills that need to be paid now. What can you do about it? Answer: you can sell your structured settlement and receive additional cash now.

So, exactly what is a "structured settlement?" The Center for Justice and Democracy describes it as follows:

Also called "periodic payments," structured settlement laws either mandate, allow defendants to request, or allow courts to require that some or all payments awarded by a judge or jury be made to the injured consumer over a long period of time. In other words, the injured consumer is prohibited from receiving payments in a lump sum. These provisions increase the hardships of the most seriously injured consumers who are hit soon after an injury with large medical costs and must make adjustments in transportation and housing. Often, the law allows insurance companies to pocket the money upon the plaintiff's death.

There are companies whose primary source of business is to purchase your structured settlement and give you a lump sum payment instead. Of course, you must pay a significant fee to gain access to money now instead of waiting. Still, it is an option for some people especially if they need the money now.

Lawsuit settlements are not the only structured settlements that you may receive. In addition, you could receive a settlement for:

1. Royalties.

2. Inheritances.

3. Lottery Winnings.

4. Annuities.

5. Mortgages.

6. Leases.

7. Life Insurance Policies.

8. Business Notes.

When deciding whether to sell your structured settlement or not, you need to consider that your proceeds -- if taken over time -- have a tendency to be eroded by inflation. $1.3 million today could be worth half that in 20 years! In addition, you may not live long enough to receive all of the proceeds, although in most cases the remaining unclaimed funds would go to your estate as an inheritance.

So, should you cash your structured settlement in? Good question! Sit down with a calculator and determine what fees you are willing to pay and what expenses need to be addressed immediately. If you have immediate pressing needs, then contact a settlement company today for more information.

Matt Keegan is The Article Writer who writes on a variety of business, human interest, advocacy, and family issues. Please visit http://www.thearticlewriter.com for more information.

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