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Many people are now offered structured settlements as payment for a liability which is incurred through insurance coverage or a civil tort judgment. This has become the preferred method of payment. While paying over time might be easier for the other party, it can be very difficult for you. Some people need the cash immediately.

There are companies who solve this problem by offering up-front cash for structured settlement payments. Basically, they will offer you an immediate lump sump and take over the collection of the structured settlement payments. While this can be a good arrangement for you, there are some concerns that must be accounted for when making such a decision. 

First of all, does your contract allow you to transfer ownership of your structured settlement. Sometimes the law will require that you be allowed to sell it regardless of the language of the contract. This is something you have to keep in mind when deciding wither or not to take up-front cash for structured settlement payments. 

Also, you should make sure that you are receiving enough cash for structured settlement agreements. It is traditionally accepted that the company who offers this will be paying a little less than the total amount collected by the structured settlement, but you want it to be a good deal. 

Tax rules, penalties, and the degree of need for up-front cash are all metrics that must be weighed in this decision. There are different rules regarding taxation for a lump sump and a structured settlement. You also must weight your current need for cash. If you are receiving a structured settlement due to an injury, are you behind on payments? A lump sump of cash might keep you up to date on payments that might result in a penalty if you fall behind. This could be a strong argument for receiving cash for structured settlement agreements. 

Ultimately, this is an important decision that deserves serious review. For some people in dire circumstances, the need for a lump sum payment is too great. This is where institutions that offer cash for structured settlement agreements can really be a life saver.

A structured settlement is not necessarily easy on someone who has been injured in an accident or victimized by property damage. If you don’t have the funds to recover your losses up front, the periodic payments might not be sufficient. Consider selling your structured settlement to receive immediate cash up front.

This Financial Services article was written by George Mandala on 11/4/2009

George is a Financial Consultant