Do you have a structured settlement or other kind of fixed annuity? Do you find that you need more cash than it is giving you? Many people opt for selling fixed annuities. This may be an option if you find getting the money sooner than later would benefit you and your family. For a number of people receiving regular payments provides them with what they need to live and gives them a certain amount of peace of mind. This is not for everyone.
Before you set your mind towards selling a fixed annuity, you need to do some research into the idea and into the exact state of your finances. It is a good idea to talk things over with a financial advisor that you trust. The process of selling fixed annuities is not like selling a property or anythings else. There is a process that you have to follow and you have to have the sale approved by a judge.
The reason there is such a process for selling fixed annuities is that there are tax implications and other financial factors that come into play. There are a number of unscrupulous companies out there who do take advantage of people’s financial worries to buy their lottery winnings or other structured settlement and annuity payments. The judge will want to make sure you understand all of this and have a good reason for selling your annuity payments.
What does the court consider to be “good” reasons for selling fixed annuities?
You want to pay down your debt or avoid bankruptcy. This is one of the best reasons for selling fixed annuities. The courts look very favorably on people who want to use the cash to reduce debt. Consider some facts about debt in the United States. There were an average of 3,422 bankruptcy filings each day in February 2015. American consumers owe nearly $12 trillion. At least 20% of Americans consider themselves to be in “debt hardship” and more than a quarter admit they have trouble paying their bills. If you can use the cash from selling an annuity settlement to avoid bankruptcy or get out of debt, that is a very good use of that money.
You want to start a business. Many start up companies go under because they do not have enough capital to get started the right away. The average cost to start a new business is $30,000, according to the Kaufmann Foundation. Selling fixed annuities to start a new business is a great way to use that cash and invest in you and your family’s future and help you fulfill the dream of owning your own business.
Pay for someone’e education. It is no state secret that going to and finishing college will increase a person’s earning potential. It is a very expensive proposition, however. From 2014 to 2015, student loan debt went from $1.21 trillion to $1.3 trillion. Students enrolled in the 2014-2015 academic year spent about $31,230 for tuition and fees at private schools and just over $9,000 at public universities, according to the College Board. If you want to go back to school or want to send someone else to college and allow them to do it without incurring a heap of student loan debt, selling fixed annuities is one way to do that. It is also hard to get financial aid if you are receiving structured settlement payments or payments from a fixed annuity.
You want to own your own home. Maybe you have your eye on a home that is for sale or maybe you want to do the renovations or repairs on the one you live in. Maybe you have a mortgage you would like to pay off. All of these are great reasons for selling fixed annuities. For most people, owning a home is a great investment and can make them feel very secure and give them a peace of mind that few other things can provide.
Most people who sell their fixed annuities, lottery payment or structured settlements are happy they did that. Only you know what is best for you but if you talk it over with someone you trust and your family, you will make the right decision.