Things You Should Know About Structured Settlements

blondeandbalanced.comAre you in one of those periods of your life where you need to pay someone a huge amount but you may not be able to afford it? You may be suffering from a compensation claim and the court may direct you to pay the amount to the other party but what if you see the only way to do it would say, be by selling your home? Don’t you want an easier way out? Well, thankfully, there is the option of structured settlements.

What are structured settlements?

An insurance or financial arrangement whereby a claimant agrees to determine a personal injury tort claim agrees to receive instead of a lump sum periodic payments on an agreed schedule and is known as a structured settlement. This injury could have been caused even through lottery winnings or worker’s compensation claims, etc.

Let us understand when and how Structured Settlements came into existence

Plaintiffs received compensation in large sums, when they won, from defendants in the good old days. It was extremely useful to pay off medical expenses and costs pertaining to the settlement however as most of them lacked the expertise financially to manage large amounts skilfully it proved to be irksome.

In 1982, Congress passed The Periodic Payment Settlement Act. It became very handy to those who did not know how to handle lump sum amounts as the law now encouraged structured settlements when it came to physical injury cases. It also gave legal incentives for those of them who used the new law. Income Tax exemption at all stages be it federal, local or state was extended to all instalments that were paid at regular intervals.

The reason why people receive Structured Settlements is not just because the Federal Act allows it but also to ensure that those receiving the money do not end up blowing it away without rhyme or reason on unwanted expenditure. The settlements that commonly come under this class are workers’ compensation, personal injury and wrongful death.

Let us understand the Pros & Cons of Structured Settlements

The brighter side of Structured Settlements or pros are that the designated beneficiaries are eligible to receive any guaranteed tax-free payments even in the future in the event of premature death of the recipient. A schedule can be drawn out on how much money has to be paid and in how many instalments that may either start immediately or on a later date, either in equal instalments or on an incremental manner, even can include lump sum payment after a period of time. There is no substantial gain or loss like in the case of stocks, bonds, mutual funds, etc. making is more secure and definitive. Interest on these amounts is exempted from capital gains. The entire contrary to the above is the darker side or the consequences and hence less preferred.

To sum up Structured Settlements are here to stay as it has been enacted by the federal Government with a purpose. You can always know more about Pre Lawsuit Loan Information.

Friday Faves: 13 days until Christmas


Happy Friday Loves.  Can you believe Christmas is only 13 days away?! I am so excited for the holidays, not only do I have some time off work it’s also my first Christmas with BF in our new apartment.  I’m looking forward to comfy pyjamas, a big ol’ Christmas tree and lots and lots of chocolate.

What are your holiday traditions?

Have a great weekend and enjoy these posts from our friends:

Debt.com – 3 Huge Debt Mistakes I Wish I Never Made

Need This Want That – When to use savings to pay off debt

Block Talk – 3 tools every small business owner needs to be successful

Thirty Six Months – Looking For a Career Change?

Add Vodka – 2 Little Known Ways That Retailers Are Making You Fat and Broke

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5 Reasons Why You Should Find a Mentor

Although often associated with the giving of advice to young people, mentoring is useful to people from all walks of life. Whether you are a student, a parent, or a seasoned entrepreneur, you will find that having a mentor will not only help you get what you want from life, but they will help you get it quicker. Here are just five reasons why you should find a mentor today.

To Assist in Goal Setting

goal setting

Image via Flickr by klbeasley

Studies such as the pioneering research conducted by Dr. Edwin Locke in the 1960s conclude that goal setting is an intrinsic part of long-term success. After all, if you don’t know where you want to go in life, you will have little in the way of motivation to help you get there. A mentor can help you clearly define your goals and make sure that you keep your focus toward achieving them.

To Expand Your Network

You’ve likely heard the phrase “it’s not what you know, but who you know” more than once. The benefits of a large network — among them increased opportunities, expert advice, and a raised profile — can never be understated. A mentor can help expand your network by introducing you to people you might not otherwise have met. You might be surprised by how many doors will open as a result.

To Provide Accountability

Accountability is not only crucial to your own success but also to those around you. A business would soon fail if its employees were not working to the best of their abilities. If you have a habit of skipping items on your to-do list as opposed to checking them off, having a mentor should help. You won’t want to turn up to your meeting with your mentor without completing the tasks and activities you previously agreed upon.

To Offer Encouragement

Self-doubt is a fundamental part of human nature. While you can overcome it, you may find yourself wondering whether you are good enough to take the next step toward your goals. A good mentor will act like a cheerleader (albeit without the pom pons). They might, for example, encourage a teaching assistant to study for a degree then take a Master of Arts in Teaching online or pave the way for a nine to fiver to start their own business.

To Foster New Ideas

You will no doubt have come across the need to ‘think outside the box’ on more than one job description. By providing a fresh set of eyes and by asking questions, a mentor can help you to look at any problem you might face in a new way. In turn, this can trigger a change in the way you think and help you devise solutions that lie far outside the proverbial box.

There are many reasons why you will benefit from having a mentor, but if you are in any doubt, the best way to see if it will work for you is to try it for a while. Kerry Hannon, writing for Forbes, explains how you can find a mentor and get started.

Debt almost ruined my life


Almost.  But I didn’t let it.  In my 20s I went through five very rough years of financial stress because of overspending and taking my income for granted.  It came to a point where I was using all my income to make the minimum monthly payments on all my credit cards and loans then I was stuck living off credit until my next paycheck.  It was a vicious cycle of paying off debt and living off debt and I was stuck.

Personal confession:  I hit rock bottom and didn’t know if I would ever get out of debt.  I went to see a bankruptcy trustee to discuss my options.  I was convinced that declaring bankruptcy was my only way out of debt.

Bankruptcy wasn’t an option

It turns out bankruptcy was just not an option for me because it would wipe out a lot more than just my debt.  I was 27 years old and over $50,000 in debt from student loans, credit cards and a brand new car.  Oh and did I mention I was a financial planner?!

Declaring bankruptcy would have meant changing my entire life.  As a certified financial planner declaring bankruptcy would have meant losing my license…and my job.  The securities commission would have revoked my license and my employer would have fired me because clients don’t want to take advice from a financial planner who can’t even manage her own money.

Bankruptcy also meant giving up my new car .  My 2007 brand new Honda Civic was the first thing I ever really bought and having it taken away from me was more stress than I could handle.  I decided to sell it on my own instead of having it repossessed.  It was still a big hit to my ego, but at least it was on my own terms.

Debt causes emotional stress

I was at my ultimate low in life during my debt years.  I would wake up sad, stress about my debt all day and go to bed angry that I let my financial situation get so out of control.  Being in debt is an emotional roller coaster and if you’ve ever been in debt you know it’s true.

I ended up in debt because I spent money every day on material things because it made me happy.  But at the end of the month when I couldn’t afford to pay both my rent and credit card bills I would be in tears.  Then one day I had a revelation.  If being in debt made me sad, wouldn’t paying off my debt make me happy?  So that’s exactly what I did.

Being debt free is my happy place

I finally decided to make a change.  I decided  I didn’t want to live in debt anymore and I started to take my life back from my debt.

After selling my car I moved to a cheaper apartment, got a second job freelance writing, stopped using my credit cards and set up regular biweekly payments onto every single debt I had.  Watching my balances go down every month was the ultimate high.

I didn’t care that all my money went to debt repayment.  I didn’t care I couldn’t go shopping anymore.  I didn’t care that I couldn’t go out for dinner with my friends.  All I wanted to do was pay off my debt and pay it off as fast as possible. That’s the key to becoming debt free: make a plan and stay focused.  It won’t happen overnight, but you will become debt free if you stick to it.

Photo from Flickr