Reasons why people want to cash out structured settlement
When you have been awarded damages in a civil lawsuit, you have the option of getting the money in a lump sum payment or through periodic payments, known as a structured settlement. Some people prefer to get recurring payments because the money will be easier to manage and it can be a source of financial stability over a long period of time.
If your circumstances change, getting structured settlement payments may no longer be the best choice for you and your family. Selling the structured settlement to obtain an infusion of cash could help you resolve an unexpected financial issue. There are several reasons why people want to cash out structured settlement.
Pay Outstanding Debts
Medical expenses, credit card bills, student loans and other types of debts can become a major financial burden. Being unable to pay your medical bills could prevent you from getting the type of treatment you need. When you aren’t able to cover your credit card bills and student loan payments in a timely manner, it could negatively impact your credit rating and make it more difficult to get loans in the future. Selling your structured settlement makes it easier to pay off high-interest debts and prevents your financial problems from getting worse.
If you have been laid off or fired from your job, the loss of that income can have a significant impact on your finances. The amount of money you receive from the periodic settlement payments may not be enough to cover all of your basic living expenses. Selling a portion of your structured settlement could give you the cash needed to keep you afloat until you find another job.
Make Financial Investments
The settlement money could be used to start a business or make investments. You can take the lump sum proceeds from the sale of the structured payments and use them to invest in business ventures such as real estate, stocks, commodities, etc… If you create a smart business plan and invest your money wisely, you could improve the financial status of your family long-term.
Pay College Tuition
When you are responsible for the tuition and living expenses of a child who is going to college, you may need access to more money than you would normally receive with the periodic settlement payments. In some situations, you may need an influx of cash for yourself if you decide to continue your education. Going to college is a financial investment in your future that could lead to more lucrative career opportunities.
Choosing to sell your structured settlement payments isn’t a decision to take lightly. Consult a financial advisor who can evaluate your financial situation and assess your needs. Once you have examined your options, you can decide if cashing out the structured settlement is the right choice for you.