Get Your Settlement Money Sooner
Waiting for settlement money from an insurance claim or lawsuit can be frustrating. You may have bills to pay or just want to move on with your life. This article explains a few methods people use to quickly get some or all of their settlement cash. We also look at the downsides, so you can make an informed choice.
Why You Might Want the Money Now
Medical Bills and Living Costs
If you were injured in an accident, you may have large medical bills or be unable to work. Settlement cash could help cover costs until you recover. Even smaller bills can be hard if you’re short on cash.
Paying Off Debts
You may also want money to pay down high interest debts like credit cards or predatory loans. Owning less money decreases stress and saves on interest payments.
Rebuilding After a Loss
If you lost a home or car in a fire or storm, the settlement could help you replace essential items and move forward after the tragedy. Having access to the cash makes that easier.
The Problem of Waiting
Court cases and insurance claims often drag on. Even if your case settles soon, payment could take 90 days or more. And if the other party appeals the judgment, you may not see the money for years.
Options To Get Cash Sooner
Settlement Loans
How They Work: Settlement loan companies offer cash upfront in exchange for some of your future settlement. You get a portion early and repay the loan plus fees when your settlement comes in.
Costs and Downsides
- Very high fees and interest rates
- Owe money even if no settlement is reached
Selling All or Part of Your Settlement
How It Works: Companies or private investors can buy all or part of your settlement in exchange for a lump cash payment now. You get cash immediately, but they take over right to the settlement money when it comes in.
Downsides
- Large discount on total settlement value
- No protection if settlement falls through
Changing a Structured Settlement to a Lump Sum
If you previously agreed to structured settlement payments over many years, it may be possible go back to court to get approval to trade future payments for a single lump cash payment now.
Questions Before Cashing Out Early
Before taking cash through any of the above methods, some key questions include:
- What fees and interest will you pay?
- How much less settlement money will you get? Is it worth it?
- What happens if the settlement falls through or is smaller than expected?
The Hard Truth and Risks
Getting part or all of your settlement early is appealing. But these deals generally carry high fees, very steep discounts, and serious risks. Read any contracts closely and make sure you understand:
- Exact dollar costs for getting money now
- Legal obligations if settlement changes or disappears
- How much less you will ultimately receive
Carefully weigh if quicker cash now is worth significantly less money down the road. There are no easy or risk free options, but clear understanding of tradeoffs helps decide what works best for your situation.