Caching in your structured settlement is an option that you may have. By cashing in the funds that you are being paid through a structured settlement, you will be getting the funds that are owed to you in a lump sum. Not all of the funds have to be cashed in, nor do you have to do this at any time that you are getting payments. The benefit of cashing in is simple. You can get a larger payment all at once. Yet, this is not always the best option that you can choose. Therefore, if you are considering it, make sure that you pay attention to the details as well as the benefits and disadvantages of cashing in.
How Cashing In Happens
To cash in, or sell your payments is to have a third party company take over receiving the funds for you and they would provide you with a cash amount now. You would secure a larger payment right now, at least part of your settlement. If you did this, you could use the funds as you saw fit. Some people need the funds to pay down debt; others need it for purchasing a house or paying for education. It may help you to start a new business or even to keep yourself out of bankruptcy. In any case, it should be a very good, solid reason to do so.
A reason for this is a fundamental cost to selling your structured settlement. There is a large fee that is paid to that third party, called a settlement broker and it will come out of the funds that are due to be paid to you. In addition to this, though, there is another key factor to take into account in regards to structured settlements.
To sell your payments, you will need to understand the value of the settlement right now. That is not necessarily the total amount of money that you originally were compensated for. But, the funds that you were paid were to be put into an annuity that would gain interest over time. Therefore, the amount that is in your annuity is only the amount that was necessary to grow through interest until it reached the correct amount. While all of the funds would have been there over time, right now they may not be because they have not taken into account any type of interest benefits.
If you wish to sell your structured settlement, it is definitely in your rights to do so. Yet, there are strict laws in place governing these changes. Those laws are there to protect you, even if they do not feel like it. Do a thorough investigation of those that are considering purchasing your settlements and make sure that you have a trusted attorney by your side through the process. This way, you will have a knowledgeable person that can walk you through the process to insure that you are not being taken advantage of. Caching in your structured settlement may be the best decision for you, but only after you have examined the benefits and disadvantages.