There’s a whole world out there of financial products I have very little understanding about. Apparently, there’s a market for buying and selling “structured settlements” for cash after you win big money after a court case. The following is a guest post by Jason from JG Wentworth which pays people cash now for settlements which are paid over time. Interesting concept and something which is worth learning about.
When a plaintiff settles a court case and is awarded a large amount of money, it may be decided that the settlement will be paid over time in installments rather than a single lump sum payment. This type of arrangement is called a “structured settlement”.
The advantage to having a structured settlement is that the money is tax-free if set up properly. Structured settlements can also be beneficial because they provide a source of income for the recipient well into the future, where as lump sum payments will more likely be spent if the recipient does not manage their money responsibly.
Structured settlement payments can also be a disadvantage, trapping the recipient into periodic payments when they may want cash now. Many settlement recipients choose to sell their settlement payments for a lump sum of cash to start a business, pay for college tuition, purchase a home or other various financial reasons.
Handling a large lump sum of cash can be exhilarating. And it can be a little unsettling, too. Money causes people to worry, and worry spins half-truths or unfounded myths about financial issues at hand. Selling your structured settlement into a lump-sum payment is an opportunity to increase your net worth — not limit it. All it takes is a little guidance from a structured settlement buyer and a plan of action for your cash to breakthrough any doubts.
Apparently there must be some controversy about structured settlements and Jason is here to help clear the air.