Structured Settlement Companies: Why Are There So Many?

في 8:59 ص on الثلاثاء، 4 مارس 2014


Structured Settlements


You see them everywhere.  Their commercials are on the television.  Their ads are in print.  Their banners show up online every now and again. 
They are the companies that buy structured settlements.  Over the past few years, their presence has skyrocketed to the point where they nearly feel unavoidable.  And with each passing year, there seems to be even more of their kind hitting the market.  But why?
In order to fully answer why there are so many companies that buy structured settlements out there, you should first have a grasp of what exactly is a structured settlement.
A structured settlement is a court-based financial arrangement where a person receives a fixed series of payments over a designated period of time.  It is designed to provide a person a steady stream of money over time instead of a lump sum of cash all at once.
However, there is enough wiggle room within a structured settlement that enables a person to sell it to companies that buy structured settlements in exchange for a lump sum.  This transaction is governed by various court regulations such as the Structured Settlement Protection Act which state that the transaction cannot be completed if the person intends on using the lump sum for frivolous means.
Very Popular
Even with the stringent legal rules in place, the notion of selling a structured settlement to a secondary buyer has become increasingly popular for two major reasons:
  • Economic downturn – Even though the country has been showing signs of coming out of economic struggles, the financial woes of the past few years – high unemployment, underemployment, and the housing bubble burst come to mind – continue to manifest today.
  • Lump sum usage – Despite the use restrictions, there are still plenty of solid uses for a lump sum structured settlement payment to be utilized.  A person can use it to pay off an overwhelming amount of credit card or student loan debt, to take care of unexpected funeral costs that might have cropped up, or to pay off unpaid medical bills that spring up in the wake of an unexpected emergency.
In essence, the proliferation of these companies can be explained by the laws of supply and demand.  As more people had gotten in financial dire straits, the need to sell structured settlements as a means to obtaining an out became more prevalent.  And studies show that the industry is still rock solid even as the economy recovers, as it currently enjoys a billion dollar status.
With all that said, the question remains:  Is contacting one of these companies that buy structured settlements the right call for you, should you have a structured settlement and are in a financial bind?  Truth be told, there is no right or wrong answer to this inquiry.  It truly depends on a host of different factors that vary from individual to individual.  Your best bet to see if it the proper procedure for you is to contact a financial expert or advisor.


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