The Pros and Cons of Receiving Cash for a Structured Settlement

Getting cash for structured settlements is a viable way to get fast cash for hard economic times. If you currently have a structured settlement and are receiving periodic payments from a personal injury lawsuit, lottery winnings or litigation hearings, then you might be eligible to receive a lump-sum payment for the rest of your structured settlement. There are many benefits of getting a cash offer from your structured settlement as some people simply cannot wait to receive payments on a period basis.

Some structured settlements pay out on a monthly, bi-monthly, bi-annual and annual basis. However, people's lives do not revolve around period payments as expenses are incurred on a real time basis. Litigation hearings and personal injury lawsuits maybe very expensive and can be a long-drawn out process. The costs associated with association with lawsuits can be astronomical. Even though people win their lawsuits and receive a settlement, the amount of money they've put into the hearing can put these people in large amounts of debt. Another benefit of receiving cash up front is that you can use that cash for investments and grow your money at a faster rate. Periodic payments mean that the cash is tied and you will have to weigh these opportunity costs before deciding to seek a cash settlement.

Remember that all structured settlements are not entitled to a cash payout and you will need to make sure to review the structured settlement with a lawyer to make sure that there are not any restrictions in selling the settlement for cash. One reason why some structured settlements cannot be sold is because of binding contracts between the person obligated to pay and the person entitled to the cash. Another consideration is to think about the amount of tax that will be tacked onto receiving a settlement.

How much money will you receive for your structured settlement? This question will depend on the company, but one thing can be confirmed, the amount you receive will be considerably less than the amount that you've received from your settlement. People who win the lotto also have the same option; periodic payments or cash pay-out. The cash payout is also much less, but the winnings are given to the winner in one lump sum. Getting cash for structured settlements is an option, and you must weigh all advantages and disadvantages before proceeding.

Source(s)

Lawcash Editor. "Litigation Financing: Plaintiff Funding." Lawcash