22 January 2008

Using Structured Settlement cash to deal with Debt

In my last post I wrote about the current stock market turmoil and the probability that if this continues then web and blog owners may start to see falls in their advertising and affiliate income. Today the FED announced a very significant cut in interest rates. This cut is clearly designed to try to stop the slump in world markets but the jury is out at the moment on whether this will be successful.

All this got me thinking about the number of people in the US and elsewhere who are clearly having debt problems - much of it mortgage debt. In such a situation people will naturally look for ways to obtain cash to control their debt positions.

Aside from trying to generate online income there of course other ways to obtain lump sums to deal with debt. One way I came across recently applies to people who are in receipt of what are called "Structured settlements". ( More info Also check Wikipedia)

Structured settlements or periodic payments are financial arrangements, including periodic payments, that claimants accepts to resolve a personal injury, tort claim or which compromise a statutory periodic payment obligation. Structured settlements were first used in Canada and the United States during the 1970s as an alternative to lump sum settlements and they are now used in a number of countries.

There are companies which will assist people to convert these periodic payments into a lump sum (check this site for example). In a time when people may be pressed for cash sums to settle debt this can be an attractive option and turning a series of future cash flows into a present cash settlement sum may make a lot of sense. Of course the numbers of people who have such structured settlements is limited and it is by no means going to be the solution to everyones problem although the same companies will also turn annuities into cash sums. (Check here for quotes). For people that have this option this may be an excellent way to obtain a cash sum for debt settlement.

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