Despite all your research and soul searching you may still be wondering if selling a structured settlement is a good idea. Let’s look at a few reasons that you might be considering selling and talk about them.
A common reason that people want to sell a structured settlement annuity is because they want to buy a new car, but is this a good reason? The answer is maybe; it depends upon your personal situation.
Buying a car can be a good idea if you truly need a new vehicle to earn money and live, and if you plan to take care of that car well so that it serves you for years. But if you have really good credit then selling your payments may not be the best way to finance your new car – many car companies offer very low, even no, interest to those with good credit, so making payments may make good sense. However, if you have poor credit and would get a high interest rate (interest rates today can be 10%, 15% and even 20% on car loans), or if you just feel that buying the car in cash will give you less stress and peace of mind, then selling your payments for the purchase might be the best decision for you.
This is a difficult question because, again, it depends upon many factors. Often, medical bills can be paid in payments, with no interest applied. If this is the case then making those payments using your structured settlement payments might be a good idea. However, even famed financial advisor Suze Orman admits that not all financial decisions are based on money alone – people come first. Thus, if the stress of those medical bills hanging over your head is damaging your peace of mind it might be a good choice to sell your payments and pay them off.
Credit card debt in the new millennium is at an all-time high, with many consumers owing tens of thousands of dollars – more than their annual income – in credit card debt. And interest rates are sky high as well; some cards can charge 18%, 20%, even 26% interest – it’s practically criminal, and you may be a victim.
If you have high credit card debt, with high interest rates, and you find that you are making only the minimum payments then selling a structured settlement might make sense to pay off that debt. There is just one warning here – this is only a logical decision if you change your spending habits and never charge those cards up again. Before you pay off your cards, read some financial planning books and make a commitment to yourself never to live off of credit again. Buy only what you can afford, cut up your credit cards, and learn to live on cash alone. If you do that, then paying off your cards is probably a great idea. Can you sell your annuity to pay off credit cards? Sure you can, but consider if it will really help you.
This is a difficult decision that depends on financial circumstances and your heart. There are many ways to pay for college and in many situations allowing your children to take out loans that they can repay later is better than risking your own financial security by selling your settlement for college tuition. However, if you feel that you can make it, financially, without your payments, and if you feel that the tuition will be money well spent, then you might go with your heart and take this plunge.
This is the easiest one of all – no. When it comes to cashing out a structured settlement early this is not high on the list of good reasons. Vacations are wonderful things, and we should all see the Grand Canyon or enjoy the dream of Disneyworld. However, a structured settlements is meant to serve a much higher purpose than this. No matter how much you feel that you need the stress relief that a vacation would surely bring,
your long term security is more important than a week away.
Call Strategic Capital today to discuss the specifics of your unique situation and whether selling a structured settlement annuity might be right for you.