Today's economic recession is a concern for many people, particularly those who did not expect it to last as long as it has. In these difficult times, those who are receiving monthly payments on a structured settlement might be wondering about whether they should opt to cash out and receive a larger lump sum now. Whether or not this is an appropriate decision depends largely on each person's own personal circumstances and situation.

First, do you sincerely need the lump sum now? Have you or your spouse recently lost a job? Are you encountering debt problems with respect to mortgage, vehicle, utility or credit card payments that may affect your credit rating if you are unable to become current? In the event that your financial situation falls into one of these categories, choosing to cash out your structured settlement now, rather than receiving monthly payments that are inadequate under the circumstances, may be a prudent choice. It may also help save your home from foreclosure and your car from repossession. In addition, it will allow you to avoid any of the consequences of having a default judgment filed against you for unpaid credit card bills, such as bank account freezes and wage garnishments.

If, on the other hand, your financial situation is more stable, you're current on your bills and have steady employment, opting to cash out at a rate anything even a little less than what your full structured settlement is truly worth, simply to have the extra money on hand, is possible but not prudent. Even though rates are at there lowest in the history of the industry, cashing out a structured settlement means that you are cashing out each payment for a discount of their actual future value. If you are not in a position to pay your bills, the percentage may seem like a small price to pay to help you catch up and get your life back in order. Those in more stable financial situations, however, might not see as much benefit to losing even a portion of their full settlement figure when they do not truly need a lump sum immediately.

In addition, make sure you shop your payments to multiple companies or use an exchange such as Settlement Quotes to handle your shopping for you. When companies compete to purchase your structured settlement, a higher offer is always the outcome than if you were to simply take the first offer.