by John Darer ® CLU ChFC MSSC RSP CLTC
An article in Sunday's Independent, highlights research that shows that Britons are advancing billions to friends and family each year and that relationships are feeling the strain. The StepChange survey revealed that 56% of those clients in debt to family relationships said their relationships had deteriorated.
While the article clearly does not say you should always refuse to lend to people close to them, it is important to recognize that most arguments and fallouts tend to occur when money is owed. The moment you ask for it back, the tension starts to build. You must have clarity over the repayment of the loan BEFORE you lend the money"
If you have received a settlement in a personal injury case, it's not a windfall even if it's the largest sum of money that you've ever had in your bank account, or if its the longest "job" guarantee you've ever had (structured settlement)
Take at least a minute to think about the reason why you received (or are receiving the money) the money and what you had to go through to get it.
You've first suffered a physical injury or you've lost a spouse, parent or child, and perhaps endured a joyless roller coaster ride through years of litigation including invasive discovery, attended depositions and been frustrated by many stops and starts.
Then consider that your settlement money may be all that you have
The payments from your structured settlement may be your sole source of income. These are not conditions where it makes sense to be lending money under any circumstance.
Don't Sell Your Structured Settlement Payments to Lend Money to Someone
If you have a structured settlement you should absolutely not sell your structured settlement payments or any portion of them to lend money to anyone because you get hit on both ends. Selling your structured settlement payment rights means selling your future payments at what could be a sigificant discount. Then you turn around and loan to a friend or family member thinking you are helping, but now knowing that there is more than 50% chance that the relationship will deteriorate?