After winning a personal injury case, the court may have awarded your compensation through a structured settlement. Structured settlements are good because they offer steady streams of payments, but they can also have negative aspects. If you are stuck with a structured settlement and really need a lump sum payment from it, you have options. Before you do this, you may want to look into your options so you can choose the best one for your situation.
Know Your Structure Settlement
A structured settlement is issued through an annuity, which is an investment type that offers a steady stream of payments. When you agree to accept a structured settlement, you must know:
- How often you will receive payments
- How many payments you will receive
- If it will last for a certain length of time, or for your lifetime
- Withdrawal fees
One of the reasons structured settlements are used is because they make it easier for a person to budget. When people receive large sums of money right after winning court cases, they may not have the ability to know how to properly invest it for the future. Because of this, the government recommends giving people structured settlements.
Before you withdraw any money from the account, you should clearly research the type of structured settlement it is, and the consequences of withdrawing money.
Reasons To Withdraw Money
While it is nice to get payments from the structured settlement on a regular basis, there are times when having a lump sum payment would be better. Here are some of the reasons you might decide to cash in your structured settlement:
- To buy a house
- To pay for your child's college tuition
- For past-due medical bills
- For plastic surgery that you have always wanted
It is not necessary to have a big reason like one of these to cash out though; you could cash yours in simply because you want to.
Before rushing into the decision, you may also want to think about your future. If you use this money now, will you be able to provide for yourself financially in the future? If you are able to work and have a good job, you might not have to worry about this. On the other hand, if you cannot work, you may need to think about how you will pay your bills for the rest of your life.
How To Turn It Into Cash
If you decide that you definitely want to cash your settlement in, there are many ways to do this, but the best way is to look for a company that purchases structured settlements. When you do this, make sure you fully understand how this will work, and find out:
- How much cash you will receive for the account
- What the fees are for the transaction
- How this will affect your taxes
Depending on how long you have had the account, you may be able to cash it in for a low rate. No matter what though, you will pay a percentage of the money when you cash it in. In other words, it will be worth less today than it would be if you had kept it for its entire life.
By contacting a company that buys structured settlements, you can find out all the details about this. You do not have to make the decision right away about whether to sell it, and it is a good idea to spend some time thinking about this decision.
If you have thought it through and are ready to go through with it, contact a company like myLumpsum.com today that offers structured settlement buyouts. Once you sign the papers, you might be able to have your cash very quickly.