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Advantages of Cashing in Your Settlement

A lot of people are not sure whether cashing in their structured settlements is a good idea. The answer is simple: everything depends on your financial situation. If you simply want the money to be able to buy a new car or go on vacation, then you should probably hold on to your settlement payments. On the other hand, if you need money to pay unexpected medical bills or send your kids to college, cashing in your settlement can be a very wise decision.

Selling your structured settlement

Selling a structured settlement is a pretty complicated task, which is best handled by a firm that specializes in these kinds of transactions. There are a ton of things to consider when preparing for a sale, for instance:

  • Every sale has to be confirmed by court. This means that the judge will need to see a reason why you need the money. Most business that buy structured settlements have teams of advisors who should be able to assess your situation and recommend the best course of action.
  • You may have to pay some tax on the cash you receive. This depends entirely on your current financial situation, so consult with an accountant for help.
  • It can take up to 3 months to finalize a sale. This depends on things like your location, type of settlement and so on. For this reason, it is crucial that you use an established and competent company, or you risk losing both your money and your settlement if the business goes under before you get your cash.

Advantages of Cashing in Your SettlementAs you can see, selling a structured settlement is a complex process that is best handled by professionals.

How much should you cash in?

In many cases, cashing in just a part of your structured settlement payments will be enough to cover all of your immediate expenses. Remember that your settlement payments are a long-term source of income which is completely tax free. This makes it crucial that you do not sell the whole settlement, unless you absolutely need all the money right away.

Remember that selling a structured settlement is not a decision that should be made lightly. Take your time to go over all available options and do not rush into signing up with the first company that gives you a quote. Always reach out to a number of providers to see who offers the best deals and advice.