Budgets and Settlement Planning for Life After Settlement

John Darer • July 1, 2025

Most People Who Sell Structured Settlement Payments Do So To Pay Bills

Budgeting and Settlement Planning

Both serious scientific surveys and the "just-for-fun" ones agree on one thing: most people sell their structured settlement payment rights because, well, bills don’t pay themselves!

Q. Why do people have bills?
A bill is issued when you owe money to the manufacturer, merchant, or provider of a product or service you have purchased. It is crucial to distinguish between essential staples, such as food, basic clothing, shelter, fuel, and medical care, and discretionary expenses, such as a new TV, a cruise, the latest gaming console, or renovating a kitchen with the newest Gaggenau range.

Q Why do people get into trouble with their bills?

Some possible reasons:

  1. Failure to budget.
  2. Failure to adhere to a budget
  3. Mismanagement of credit.
  4. Price increases in goods or services that stretch or exceed budgeted and available income resources
  5. Failure to monitor budget and adjust for increases in prices of necessary goods and services with a concomitant reduction in discretionary spending
  6. Unexpected large expense for unforeseen medical needs not covered by insurance
  7. Loss of income due to job termination, death of spouse or divorce
  8. Excessive or irrational largesse due to Transition Stress from sudden money or sudden wealth (tort victims, beneficiaries of inheritances and lottery winners)
  9. Failure to set up and maintain a reserve fund


Budgeting might not be glamorous, but the consequences of skipping it can be harsh. The old saying, "people don't plan to fail; they fail to plan," holds true, whether you have a structured settlement or have experienced being a tort victim.

For tort victims, adopting good practices early is essential, and budgeting should be an integral component of settlement planning and litigation recovery management.


Structured settlement annuities can be very helpful to the budgeting process by providing guaranteed income streams and deferred lump sum payments tailored to specific needs and time frames





The potential reasons for the inability to pay bills extend beyond tort victims and those who receive structured settlement annuity payments.



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