Tuesday, September 21, 2010

Advantages and Disadvantages of Structured Settlements

Just like everything else in the world there are advantages and disadvantages of buying and selling structured settlements. Structured settlements are organized between two parties when the customer party is having issues paying off their debts to the debtors or creditors. These settlements help ensure timely payments from the client's end and make sure the money they save for their debts is focused for that specific purpose. There is another direction or way in which structured settlements are applied. This is for you own good. For instance a minor person who has suffered an injury and has to undergo a long term medical process can buy a structured settlement and make timely deposits to it.

Depending on what the terms of the agreement are he or she will be paid specific amounts of money in specific time intervals that will help them save up and have money especially for their treatment. In this case they will not have to worry about over spending or not being able to save enough. These structured settlements are especially beneficial for retirement times. People can start depositing specific amounts of money when they are in the early to mid forties and by the time they hit their sixties they will not need to work anymore. It will allow them to lead a peaceful and work free life. Their stress levels will substantially reduce and it will be very good. Even for people who are ambitious and feel they might require a lump sum amount of capital for their future plans can start saving up with structured plans.

These are all the sugar coated amazing facts of structured settlements; however like everything else there are a few disadvantages. These are not demeaning to anyone by any means; however are things that must be considered in order for people to be careful with their money and get the best out of their settlement.

One of the setbacks of a structured settlement is that it limits your amount of expenditure. This is not your daily grocery expenditure, rather money you would spend on buying things like a new home or perhaps a new car. You will be restricted to do this because of your overdue debt. In addition to that it can become very difficult for you to be able to buy anything against you outstanding settlement and debts especially if you require a bank loan. No bank will even consider providing you a loan with bad debt lying around the corner and a settlement for you to resolve. This is just a settlement you may have against a debtor. If you are investing money for you future, it can be another predicament.

This is because you will not be able to withdraw the money once you deposit it because it goes into a secure account. You will only receive once it is time for your installment. Also, because you are required to pay money in this case to save up you will not be able to spend it elsewhere.


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