Structured Settlement Lump Sum Payment
Structured settlement lump sum payment is something that is becoming more and more common in this litigious society. The use of a structured payment often arises when the defendant simply doesn't have the money required to pay off the settlement. The structured payment system allows the defendant to pay off the settlement over time thereby avoiding bankruptcy or financial upset.
A structured settlement is usually arranged by the two lawyers when the outcome of a case is fairly certain and there is no need to continue the court sessions. A settlement can then be arranged that the defendant can afford and is able to pay. A structured settlement can be advantageous also to the plaintiff.
A structured settlement instead of a large lump sum will allow the person receiving it to have a steady income for a specified amount of time. This can be helpful, especially when the person receiving the money is not savvy in the ways of investing large sums of money and could become prey to poor investments or to being taken advantage of. A regular amount of money coming in over time will help with meeting bills and keeping things on a regular basis.
Many structured payments coming from insurance companies are set up in the form of annuities where the payments that one receives are from the interest earned. When dealing with an insurance annuity there are several things to take into consideration. One is that the insurance company may receive a rebate on the purchase of the annuity. If this ends up being the case, the rebate can be assigned to go to the person receiving the annuity.
Some insurance companies will try to overstate the value of the annuity to make it appear to have more value than it does. Checking out the value will be an important step in accepting an annuity. Many annuities do not have as high a rate of return as other forms of investment, but they may be a safer form of investment if you are not money savvy and able to prudently manage large investments.
Another thing to think about when accepting a structured settlement is the cost that may be involved to turn it into a lump sum. A lump sum payment may be advantageous if you are making a large purchase such as a house. There are ways to change the structured payment into a lump sum, but this should be done through a dealer who does so on a large scale. Take time to do the research to determine who will give you the best deal.
Structured settlement lump sum payment--the choice should be the type that will be best for you. Make sure that you have it drawn up by a lawyer who is familiar with that type of settlement. Take your time and make sure that you are doing what is in your best interest.
Settle Your Credit Card Debt Through Lump Sum Payment
While it might be hard for some (or a lot) of people, calling your credit card company to discuss your situation is perhaps the easiest thing to do. Though they may not be cordial and warm if you tell them you are having a hard time paying your credit card debt, letting them know yourself reflects a good image of you that presses on them. It shows them that you want to settle your debt and that is a good thing.
When you call your card company to discuss your debt settlement options with them, it clearly shows that you are facing the problem rather than avoiding it. With the credit crunch that has been going on, most card issuers are more than willing to forgive 20%-40% of credit if they can at least get the remaining amount.
The most probable plan they are likely to offer you is debt settlement through lump sum payment. That means if you can pay a certain amount within a certain schedule, they will clear off any remaining balance. For instance, if you owe a credit card company $10,000.00 and they are willing to take a lump sum of $7,000 in a matter of 40 days, all you have to do pay them $7,000 within 40 days and the remaining $3,000 is forgiven.
While there are obvious advantages, the hard thing about lump sum payments is raising enough money with the given time frame. But if you can manage to gather the funds in as little as 40 to 50 days, then settling your credit card debt through lump sum payment is certainly a great way out.
Structured Settlements Offer Advantages over Lump-Sum Payments
A structured settlement, which offers injury victims cash payments through a long-term annuity as compensation for their damages and medical expenses, offer a number of possible advantages over payment in a lump sum. While the lump sum payment is the traditional way for responsible parties to pay accident claims, the structured settlement offers payments over the span of an agreed-upon period of time. This length of time may span from several years up to the remainder of the life of the injured party, depending on the severity of the accident, the amount of money involved, and the agreement reached between the two parties.
Depending on the specific circumstances of the case, structured settlements can have numerous advantages over a lump-sum payment:
• They are tax free. Thanks to a 1982 change in the Federal tax code, payments on a structured settlement are free of state and Federal taxes. The paying party funds the settlement through the purchase of an annuity which earns the interest to fund the continued payments. This is not the case with a lump-sum payment, which the injured party must invest themselves. Any interest earned on those investments are taxable.
• They are potentially safer. Most people who come into a large sum of money suddenly find that they are quite popular with long-lost relatives, unscrupulous purveyors of investment schemes, and good, old-fashioned thieves. By receiving payments in substantially smaller amounts, the beneficiaries of a structured settlement have far fewer worries about having others take advantage of them, which could leave them both poor and without adequate medical care.
• They are simply less trouble. It's difficult enough to adjust to changes in your life if you are seriously injured without having to also take the new responsibility of investing and managing a large sum of money. Not only must you invest the money, but you must invest it wisely, knowing that it must continue to fund your living and/or health care expenses. The regular payments of a structured settlement, along with their tax-free status, simplify day to day living considerably.
While they are not ideal for everyone, particularly those who are experienced investors or those who need a large sum of money at once for immediate medical expenses or the purchase of a home, structured settlements can offer a simpler, safer payment solution for many people who are victims of an accident or injury.
