Insurance and Credit

Buying structured settlements as a form of investment is popular with both investment businesses and with some individuals. These settlements are compensation payouts which are given to people in place of a lump sum payment. The payments they receive here will be made to a staggered schedule agreed at the beginning the settlement.

Although many people like the structure of this kind of deal to start with many also find that they would prefer some form of cash sum instead as time progresses. Their circumstances may change or they may need to get their hands on larger lump sums to buy or do something big. So, many people will then sell on their structured settlement to a third party.

This gives the original settlement owner a one-off cash sum and the settlement itself is then owned by the person who purchased it. They then get the regular payments that are left to be made according to the plan’s original terms. This is such a popular investment as it is viewed as being relatively safe and gives a good return on investment in many cases.

Most structured settlements are funded by the purchase of annuities so, if you buy a settlement from somebody else, then you are essentially buying annuities that are designed to pay out specific sums of cash at guaranteed times. The money that you make here will vary but it is usually attractive enough to make this a popular type of investment.

Say, for example, you buy a structured settlement from an individual who was awarded $500,000 to be paid out over five years in equal lump sum payments of $100,000. After a year this individual decides that they would actually rather have the money so decide to sell their settlement.

So, if you buy the settlement (which now has $400,000 left in payments due) for $200,000 then the owner gets this as a lump sum. Over the next four years you will be paid $100,000 a year until the settlement is done. This gives you a profit margin of $200,000. The fact that you know that the payments will be made here make this an attractive option for many investors.

Another reason that these are popular investment products is the fact that the lump sums that you gain every year may be more than your money would earn on an annual basis for standard stock market investments. $200,000 invested in a buoyant stock market with returns of 6%, for example, would see your $200,000 earn just $12,000. Your $200,000 invested here would give you four years of $100,000 a year.

Finally, there are also tax advantages to be had from most structured settlement agreements. This can make them an even more attractive prospect for investors who are looking to minimize their investment costs and outgoings. However, as with any investment you should make sure to take qualified advice before you buy any structured settlement agreement. It is important that you understand your obligations here and how the investment will actually work for you before you do anything else.

If you are experiencing financial problems then you may well feel as if your debts are spiraling out of control. Before you know it you may find that you can barely cope with servicing the minimum payments on loans and credit cards, for example, and your outgoings are such that you get further into debt every month just to make ends meet.

There are various options open to you when it comes to sorting out your debts. Some, such as bankruptcy, can be a fairly extreme measure to take that can have a range of negative effects on your life and your credit history in the future. Others, such as debt settlement, may offer an easier and less stressful solution.

Debt settlement is, in effect, basically a process whereby you (either on your own behalf or with the help of a debt settlement company) try to wipe out your debts by making a settlement payment towards them. You may not be able to pay these debts off in full but the company to whom you owe money may take a part payment as an alternative rather than see you default on your account completely later on down the line.

So, for example, you could work with a debt settlement company to settle a credit card bill with a lump sum payment. The debt settlement company will try and get the credit card provider to accept your lump sum as a one off settlement to clear the money that you owe.

In other cases some companies offer solutions where there is no lump sum available whereby you build up cash on a regular (i.e. monthly) basis to put together enough money to make up a viable settlement. The solutions on offer here will vary according to your financial circumstances and the company that you choose to deal with.

You can, of course, choose not to work with a settlement company here and do the job yourself. There is no reason why you cannot approach your creditor(s) direct if you want and try and work out a settlement deal with them. For most creditors this will be a better option than seeing you declare yourself bankrupt when they will have little chance of recovering any of their money.

It is important to realize here that this kind of debt settlement solution will not work with all debts. It tends to be most used for credit card debts, for example. It also comes with a range of potentially negative effects that you should think about before taking this route.

For example, debt settlement will show up on your credit rating which could have a negative effect on your future financial dealings. There may also be tax issues here in certain countries as some tax legislation views cancelled debts as taxable income.

As with any kind of debt management solution you are always advised to take considered and independent advice before you choose your best solution. This may well be debt settlement in the end but it is always a good idea to check out your other options first before you make a final decision.

Debt settlement is a debt management process that allows a consumer to ‘settle’ a range of debts by making a specific move to pay off some of them. The creditor to whom the money is owed will, if they accept the settlement offer, wipe off the rest of the debts that remain.

There are various ways to take on a debt settlement solution. You can take a do it yourself approach here and simply approach your creditors and try and negotiate a settlement agreement with them. Alternatively, you can use a debt settlement company that will do this on your behalf.

The first route works well for some people but others find it hard to actually negotiate with creditors themselves and prefer to get help to do so. Using a debt settlement service can make things easier but will cost you money as most companies here will levy charges to help you get your debts settled.

There are various ways to settle debts here. In some cases you can offer up a lump sum payment and try to get your creditor to agree to take this and to write off the rest of your debt. This may well work as the creditor may take the view that something is better than nothing which is what they would potentially get if you took other debt management solutions instead.

Alternatively, a debt settlement company may negotiate a monthly payment plan if you do not have a lump sum to offer. They may, for example, negotiate a deal with your creditor and then work out how long you will have to make monthly payments to build up your lump sum. You then pay this to them until the sum is ready to be paid to the creditor.

The company here should work on your behalf to keep the creditor off your back while you get the lump sum payment together. This may include getting the creditor to lower your monthly repayments or to put them on hold but in some cases you may need to also make full minimum repayments.

This kind of debt solution can work really well with certain kinds of debts such as those incurred by credit cards. This is not a route to take without consideration, however, as it can have negative effects. For a start, if you use a settlements company then the service will cost you extra money

You may also find that some credit card companies will be less patient than others whilst you build up your lump sum and they still have the legal right to chase you for money. Additionally, in some jurisdictions any money that is written off in this way may be liable to taxation so you may also need to check out this issue before you choose this debt management solution.

However, the kind of settlement solution may well be your best option if your debts are getting on top of you and you want to make a clean break. Taking control here could put you back on the financial straight and narrow sooner rather than later.