Have structured settlements and need cash now?
When you finally reach a settlement in law, the court may allow structured settlement payments for the defendant. While this is certainly beneficial to the person who wronged you, especially if they are financially disadvantaged, it comes at your immediate expense. Rather than receiving all the money you may need now, you receive it in small chunks. By the time you receive the full extent of what you are owed, you may already be deep in the hole financially. This can’t be the fair and just outcome you expected from your lawsuit! Rather than relief, you are financially frustrated, and in much the same position as before your lawsuit began.
In this article, we are going to discuss the ramifications of structured settlements for successful plaintiffs. We’ll cover the ins and outs of structured settlements, why they may be disadvantageous for you, and what you can do to get your money now instead of waiting. If you’re eager to have your settlement money now, continue on, dear reader.
What Are Structured Settlements?
A structured settlement is the result of a financial arrangement–the settlement–following a lawsuit victory for or arbitration agreement in favor of the plaintiff. Generally, these settlements are a fiscal punishment or retribution assigned to the defendant for personal injury claims, negligence, wrongful death, or other complaints for which monetary punitive action is appropriate. However, for financially disadvantaged defendants, paying the settlement in full may be crippling, or even outright impossible. Additionally, the court may deem that a lump sum would be less beneficial to the defendant, who may require long-term financial stability.
A structured settlement aims to solve both of these problems by charging the defendant over time and rewarding the plaintiff with tax-free repayments over a specified period of time.
Structured settlements are meant to have the best of both worlds: financially stable payments for both defendant and plaintiff. However, because of their regular, recurring nature, they suffer from inflexibility. Life goes on and, as time passes, situations may change. You may suddenly be in need of a lump sum of cash instead of the static, regular payments.
The Need for Cash Now
You may suddenly desire a lump sum for any number of reasons. An unexpected medical expense requires your immediate attention. Debts have caught up with you. Your child needs support for their education. Whatever the cause, you have a need for money now, and waiting for your future payouts has become harder and harder. Structured settlements are, by design, inflexible to these monetary demands, and are unable to assist you when immediate financial needs arise.
You may find yourself wondering if there is a way to get the cash you need now instead of waiting. We are here to tell you that there are several ways you can solve your financial woes that don’t involve taking on further debt. So to speak, you can have your cake and eat it too. You can have your money now and not incur additional responsibilities. You can do this by selling your structured settlement, or by taking out a cash advance against your settlement.
Options for Getting Cash Now
You don’t have to wait for your money from your structured settlement. Instead, consider the following low-risk alternatives:
1. Sell Your Structured Settlement
The most straightforward method to cash out your structured settlement is simply to sell it. By “selling”, we mean that you sell the ownership of your settlement to a buyer, usually an annuity or lending company. In exchange for the rights to collect on behalf of your settlement, the structured settlement buyer will pay you a percentage of the ultimate payout amount immediately. Generally, you can negotiate whether you wish to sell a portion of your payouts or the remainder of your structured settlement amount.
One essential thing to remember is this: you are selling your settlement, usually for less than the ultimate amount of the settlement itself.
Companies that purchase structured settlements do not do so out of the kindness of their hearts; they intend to make a profit by providing you the exchange of instant access to funds. Generally, buyers will apply a discount rate to account for the time delay of earning your settlement over time, and they may further discount your ultimate settlement to fuel their own profit margins. That is not to say the company is cartoonishly evil; however, it is a business venture, and they do need to make money in return for providing you the service of instant access to funds.
So know that, fundamentally, you will be receiving less money overall than if you simply waited for regular payments of your structured settlement. However, depending on your situation, this may be an exchange you are willing, or required, to make. Only you can decide what is best for your situation.
2. Advance or Loan Against Your Structured Settlement
The other option which is most common for structured settlement recipients is to borrow a cash advance against your settlement. Rather than selling your structured settlement, where you literally no longer own the rights to receive the payout, with a cash advance, you still own your structured settlement. However, this is more literally a loan; you will have to payback the lending company the money you borrow, usually against the amount of your structured settlement as collateral.
These loans give you more direct control, both over the amount you can loan at a time and the way in which you pay it back.
However, it is important to be cautious about the terms of your loan. Generally, they come with steep interest rates, and failing to payback in a reasonable time can result in immense fees. Interest is, critically, not a factor you have to worry about when you simply sell your structured settlement.
Frequently Asked Questions
What is a structured settlement?
A structured settlement is a financial arrangement where a plaintiff, typically in a personal injury or wrongful death case, receives periodic payments instead of a lump sum. These payments are intended to provide long-term financial security to the plaintiff and are generally tax-free. They are a potent financial solution for both plaintiff and defendant, but they are generally inflexible to immediate financial needs.
How does selling a structured settlement work?
By selling your structured settlement, you transfer the rights to collect future payments to the structured settlement buyer, usually a loan or funding company. In return for the sale, you receive a lump sum of cash which is some percentage of the amount of your structured settlement itself. The sale process requires court approval to ensure that the plaintiff is receiving a fair trade in exchange for their settlement. While it results in an ultimately lower payout for the plaintiff, it also provides immediate funds access where it would be otherwise impossible.
How much money can I get for selling my structured settlement?
Since you are giving up the opportunity to earn future payments in full, you may be concerned about the amount of money you can actually earn. The selling price of your structured settlement is always a fractional amount of the settlement value itself. Generally, the buyer will apply a discount to the value of your settlement based on the amount of time required for full payout, their desired profit margin, and projected inflation rates. As such, you will always earn less from selling your settlement than if you had simply waited for the payouts over time. However, this again comes with the significant disadvantage of not having access to those future payouts until the time comes to receive them. You may need a lump sum for your immediate financial needs. The exchange of total opportunity for immediate opportunity is the fundamental transaction of selling your settlement.
How long does it take to acquire the cash?
Upon agreement between you and the buyer, the process of selling your settlement can take anywhere from a few weeks to a couple of months. This is because conducting the sale requires court approval. So, depending on the complexity of your agreement and the terms discussed between you and your buyer, the courts may require time to review the agreement and determine that it is ultimately in your best interest.
Will my credit score be impacted if I sell my structured settlement?
Since selling your structured settlement is just ultimately a transactional agreement, it has no bearing on your credit score. No part of the process even requires a credit check, and so is at no risk to your financial reputation.
On the other hand, if you were to ask for a cash advance on your settlement, this would impact your credit. The cash advance is itself a loan, and so comes with more traditional loan baggage, including credit checks and regular paybacks. Failing to payback your loan could result in further negative impact on your credit, so this option carries more inherent risks to your financial reputation.
Obtain a Structured Settlement From Legal Bay Today
Legal Bay is a trusted buyer of structured settlements, offering fast and reliable funding to plaintiffs. As one of the best pre-settlement funding and structured settlement buying companies, we’re committed to transparency and customer satisfaction. No hidden fees or complicated agreements. Legal Bay ensures that you get the financial support you need. Check out some Legal Bay funding reviews to see how we have helped clients get the funding they need.
If you have found yourself wondering “I have a structured settlement, but I need cash now,” look no further.
No matter your financial need, if you need to cash out your structured settlement now, Legal Bay is here to help. Contact us today to learn more about our structured settlement buyout options and take the first step toward securing the financial relief you need. Our expert team is standing by to answer your questions and help any way you need.
Ready to get started today? Apply for a Legal Bay structured settlement cash out now and get the cash you need to stay above ground. Contact us to speak with a funding specialist and take control of your financial future.
Apply Today
Getting started is simple. Our application process is easy, straightforward, and best of all, free. Once you submit your application, our team will work with you to determine the best approach for getting the money you need quickly. We’ll explain it in transparent and simple terms, and work hard to find you the best deal.
Contact Us
Still Have Questions?
Still not sure what to do? Taking actions toward selling your structured settlement can be frightening and full of uncertainty. If you are unsure about your next steps and need help determining whether or not selling your settlement is the right choice for you, then contact Legal Bay today. Our experienced team of financial advisors and legal professionals are eager to answer your questions. We will provide you with clear and unbiased advice so you can make the best decision for your financial future.
Useful Links
Interested in learning more about what we do? Explore other blog posts on our website to learn more about structured settlements, legal funding, and financial planning. We hope that better educating yourself can lead you to making well-informed decisions in the future for you and your financial needs.
Structured Settlement Sale: Immediate Financial Security
Structured settlements are well-planned repayment strategies that balance the financial needs of plaintiffs and defendants in the best way possible. However, because they are inflexible in payouts, structured settlements don’t always align with your current financial needs. Sometimes, you just need that lump sum cash out instead. The best ways to receive immediate financial relief are to either sell your structured settlement or to borrow against that settlement by taking out a loan.
It’s important to weigh the pros and cons of both approaches so that you can best prepare for your future. If you are unsure of the details, then consult a professional! Legal Bay is here to help by arming you with knowledge and giving you the financial support you deserve and desire. Reach out to us today to see how we can help you achieve your financial goals.
