If you have won a lottery or lawsuit, the payout terms probably have you getting payments over a span of multiple decades. Big lotteries, like the Mega Millions, pay winners one big payment and then follow that with one yearly payment for about 29 years. For that lottery, each yearly payment is about 5% more than the payment that preceded it. These payments are taxed by the Internal Revenue Service the same way income is. If you need money sooner, you can withdraw some of it but there is a penalty. Many people find that they cannot afford to wait for their annuity payments. Many people choose selling fixed annuities rather than getting the payments over time.
This is a big decision. If you are considering selling fixed annuities, you should talk to a trusted financial advisor and go over your situation with your family. You will have to justify your decision to a judge who has to ok it before you can sell your structured settlements.
Reasons you might want to sell your fixed settlement:
- You want to avoid filing for bankruptcy. This is a great reason for selling fixed annuities. In 2015, approximately 3,400 people filed for bankruptcy every day. Most Americans have at least 13 credit cards. The average American adult also owed a lot in students loans (more than $11,000), on car loans (more than $8,100) and a ton on mortgages (more than $70,000). These figures are all per household. If you are looking at bankruptcy, consider selling your fixed annuity. This is a much better thing to do for your credit than file for bankruptcy.
- You have medical bills that you cannot pay. Nearly half of all bankruptcy filings in the United States are caused by medical debt. Many people live just one medical crisis away from bankruptcy. In 2014, nearly 35% of the American population or 64 million people said they had trouble paying their bills and that included medical debt.
- You want to pay for someone’s education. Getting a higher education is a great way to increase your earning potential but incurring student loan debt is not. College is expensive. For the 2014-15 school year, in state tuition at public universities was more than $9,000 and exceeded $31,000 for private schools. If you get structured settlement payments, you cannot usually get financial assistance. Neither can your dependents. If you want to go back to school or pay for your kids’ educations, selling fixed annuities is one great way to do that. This is what getting cash for structured settlement can be all about.
- You want to buy a home. The average price of a new home was over $270,000 in 2010. You can sell structured settlement payments to buy a home without having to have a mortgage hanging over your head. If you already own your home, you can either pay off your mortgage, renovate it to make it into your dream home or both. This is a great way to improve the quality of your life while improving your credit rating at the same time.
- You want to start a new business. Most new businesses fail because they cannot get access to the right amount of start up capital. If you have a structured settlement, you can get cash for structured settlement payments and invest it in the business you have always wanted to start. This is a great investment in your future.
The decision to sell fixed annuities should not be taken lightly. It is a big decision and has ramifications that you might not fully appreciate. Take some time and talk to people you trust. Find an experienced and qualified financial advisor who has experience helping people sell their annuities. Bring them your financial information such as bank account information and credit report. Explain your situation. Also take the time to talk to your family. It might be better for you to get the settlements over time. Most people who sell are happy, more than 90% of people who sell their annuities report being happy with that decision but every situation is unique. If you take your time, do your research and think hard about what the best thing for you is, you will make the right decision.