Structured Settlement: The Definition
A structured settlement is a financial arrangement in which the structured settlement recipient agrees to receive periodic payments over time, instead of receiving that money up front, as a lump sum. Structured settlements are usually negotiated in connection with personal injury cases.
Structured settlement recipients can generally be divided into two camps: those who like receiving their payments at regular intervals, and those who would prefer to get their money sooner. Neither position is “wrong” per se and it is truly up to the individual to decide what is best for his or her own situation.
Selling Structured Settlements: The Motivation
In general, there are three main reasons why many folks decide to sell their structured settlement payments:
Reason one: selling structured settlement payments can help you climb out of debt without borrowing money from an alternative source.
Callers to J.G. Wentworth, the nation’s largest purchaser of future structured settlement and annuity payments, frequently tell our representatives that they have decided to sell their future payments in order to unburden themselves of a debt, or debts, that are hanging over them. Long-term unemployment, unforeseen medical costs, higher-than-expected student loan payments, credit card debt – the list of reasons even the most responsible among us can owe money is a long one – and selling structured settlement payments can help pay those debts off, often helping to eliminate the need to borrow money from any other outside source.
Reason two: selling structured settlement payments can allow you to make an essential purchase for either yourself or your family.
A second reason folks choose to sell their structured settlement payments is to make an important purchase that could benefit themselves or their families for years into the future. Such “big ticket” items can include a car, a home, college tuition, or another expenditure that has real long-term benefits for yourself or your loved ones. After all, why wait for money to get to you years, even decades, in the future, when you can use it to buy something invaluable today?
Reason three: selling your structured settlement payments means you will not be waiting for inflation to lower your settlement value.
Another reason folks choose to sell their structured settlement payments is to avoid the devastating long-term impact inflation can have on the value of one’s money. To give just one example, if you are expecting to receive regular settlement payments of, say, $10,000 a year for 20 years, it is important to recognize that that does not equal $200,000 in today’s dollars. That’s because the impact of inflation over time can erode the value of these payments, sometimes substantially. But if you sell your structured settlement payments now, the dollar amount you are receiving will translate to “true” purchasing power in today’s terms.
Selling Structured Settlement Payments: The Bottom Line
The decision to sell structured settlement payments is a deeply personal one, and should only be made after much reflection upon both one’s short and long-term financial needs. But if you need cash now, it may also represent the best way to get that cash sooner. None of us truly knows what the future holds; the best we can hope for is to make the smartest decisions possible with the information we have today. For further discussions about your own situation, or to receive a free, no-obligation quote on the value of your own payments, we encourage you to call our company, J.G. Wentworth, the nationwide leader in purchasing structured settlement and annuity payments for cash. Call us anytime at 877-227-4713.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.