Are you thinking about selling your structured settlement payments for a lump sum payment? If so, there are few facts that you should know before making a final decision regarding the sale of your payments:
Fact: There Is No Guarantee That Your Future Payments Will Be Made
When collecting a structured settlement, there is always a risk that you future payments will not be made according to the terms of your original settlement. If the individual or corporation responsible for paying your structured settlement files for bankruptcy or is no longer able to pay, you could find yourself with a settlement that truly is not worth the paper it is written on.
When you choose to sell your structured payments, all of the risk that comes along with these payments will be transferred from you to the investment firm who is purchasing your payments. This is one of the primary reasons why structured settlements are not purchased at face value.
Fact: A Lump Sum Payment Will Actually Allow You To Grow Your Money
When receiving structured payments, the amount of these payments will not accumulate interest or be increased to reflect the rate of inflation since the time your settlement is awarded. Consequently, your settlement may actually be worth less in the future than it is today.
If you choose to turn your structured payments into one lump sum, you will be able to invest this money into an interest-bearing account, real estate purchase, or other type of investment which can yield a high return on your money. In this way, choosing to sell your payments can actually earn you money even though you are selling the payments for less than their face value.
Fact: You Don't Have To Sell All Of Your Payments
If you are worried that selling all of your structured payments will leave you without a safety net in the event that you lose your regular income in the future, you should know that you are not required to sell all of your payments in order to receive a lump sum payment. In fact, you can choose to sell as little as just one or two payments if this is what works best for you.
By choosing to sell only partial rights to your future payments, you can ensure that you have some money coming in each month and have the money you need to cover a large purchase or unexpected expense.
Share14 May 2015
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