Buying / Selling a Structured SettlementAs you might imagine, anything involving money is quickly taken advantage of by dishonest people. Let's say you were awarded a structured settlement for $500 a month for the next 40 years. You might immediately start to get phone calls from companies who want to 'buy' your right to that money in exchange for $10,000 up front. You give them the long term ability to get checks - and they give you $10,000 in cash. It might seem really tempting!
But of course, if you were patient and took the $500 for 40 years, you would end up with $6,000 a year times 40 years = $240,000. That is FAR more than $10,000!! That's why these companies do it - because they make huge amounts of money based on your desire for instant gratification. Also, the whole reason the structured settlement was set up was to help ensure that you had money coming to you for many years to pay your bills. By taking it in one lump sum, you now have damaged your own financial security in the future.
That all being said, what if you had that $500 for 40 year arrangement - but were suddenly diagnosed with mesothelioma and were told you only had 1 year left to live. And let's say you were told that you MIGHT be cured, if only you had $20,000 to undergo a super high intensity therapy. In that case, it might be well worth it to sell out your structured settlement. You wouldn't be able to use the long term money anyway - and your immediate focus was simply on surviving.
Even if you have an extreme situation like this, though, be sure you talk to a lawyer who specializes in this area. That way you can make sure you get the very best deal for your settlement.
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NOTE: I am not a lawyer or doctor, please always talk to professional advisors to get personal advice on your situation.
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