07 Mar High Interest Credit Card Debt Necessitates the Need for Selling Lottery Payments
The dreams seem real. Imagining what you would do with major lottery winnings can create some major fantasies, as well as reality checks about what you would do with access to a large amount of money. Any windfall, of course, comes with the initial decision between two major choices. Deciding between a one time payout and a structured payment schedule is the first step. The choice between the two major options can be the result of any of the following:
- Lottery winning
- Settlement from a medical malpractice suit
- Buyout option from an employer
Selling lottery payments or taking a lump sum from a buyout option from a soon to be former employer have similar talking points. First and foremost, what will you do with the money from a lump sum payment if you decide that selling lottery payments or taking the upfront cash from a buyout offer is the best decision?
Sound financial advice indicates that any decision that will help you pay off current debt, especially high interest credit card debt, is a good one. Unfortunately, more than 40% of American families are in the habit of spending more than they earn. Continued practice of over spending can lead to overwhelming debt, often at very high interest rates. Consider the following crippling statistics about individual debt in our country:
- The average household in America makes payments to 13 different credit cards.
- The average adult in America owes $11,244 in student loans.
- The average adult in America owes $8,163 in automobile loans.
- The average adult in America owes $70,322 in home mortgage loans.
- The average adult in America owes $3,761 in revolving credit debt.
- Combined outstanding auto loans in this country grew from $866.44 billion to $943.76 billion between the years 2014 and 2015.
- Combined outstanding student loans in this country grew from $1.21 trillion to $1.3 trillion between the years 2014 and 2015.
Knowing these figures, it is not surprising that the daily average for bankruptcy filings in February of 2015 was 3,422. If this average continued on a daily basis, there would be well over 1 million bankruptcy filings in a year. Staggering statistics to say the least.
Selling lottery payments, or taking the cash up front from an employee buy out or court case settlement is definitely sound advice if you are one of the 40% of Americans who is in the habit of spending more than you make and, as a result, increasing your overall debt. Even if you are part of the 60% of Americans who control your spending and do not spend more than you earn, consider the possibilities of what you could achieve by selling lottery payments:
- Pay for college tuition
Whether you decide to use money from selling your annuity for your own college education or the college education of a child or grandchild, this money will be well invested. The benefits of a completed college degree are many, but the cost of achieving this diploma can be overwhelming. A paid in full diploma will provide financial benefits for many years to come.
- Paying off an overextended home mortgage
Cash from an annuity settlement or lottery payout provide the opportunity to improve or erase your home mortgage situation. As the nation continues to deal with the debt crisis, many Americans have rolled extra debt into lower interest home loans. A low interest home loan exceeding the marketable value of your home, however, is not a wise financial choice. If you find yourself looking at a mortgage balance that is greater than the initial loan you took out on your home, using annuity cash to pay down or pay off this loan would be advantageous.
- Reward yourself
Whether you decide to take a dream vacation or buy a vacation home, selling lottery payments or cashing in on other structured settlement options can allow you the possibility of rewarding yourself or your family with quality time in a beautiful location.
What to do? What to do? The choice may seem difficult, but if you are faced with the decision to take a lump sum payment you are in the position to select between two very good choices. Consider the options and make the financial decision that makes the most sense.