How Can I Sell A Structured Settlement

Is cash for structured settlement payments possible? The simple answer is, yes, indeed you can. There are plenty of companies out there that are willing to "buy out" your structured settlement payments in exchange for a large, lump sum of money up front.

Though this certainly sounds like a great idea, you need to make sure you understand all the ins and outs of the idea before you jump in with both feet.

First, consider the fact that you ultimately will be settling for less money. Yes, you'll get it all up front, but if the company buying out your settlement didn't charge something for the service, it would be a complete waste of time for them. These companies are willing to bide their time and wait for the money to roll in and make a profit.

Second, make sure you actually need the money. If you want to go on vacation or want to buy some new frivolous gadget, consider holding onto the payment plan. Emergencies such as unforeseen illnesses or disasters, on the other hand, may warrant you exchanging your payments for cash.

Third, exercise some patience. "Patience is a virtue" as the old saying goes, and it is certainly true. Just like some folks stick with a job they hate simply because they're close to retirement, you should consider sticking with your payment plan. If you can ride it out, it will have a greater payoff in the end.

Lastly, consider investment. There are plenty of investment plans out there that will allow you to have your settlement payments rolled directly into whatever financial investment plan works best for you.

On the other hand, if you can afford it financially and don't mind taking more of a gamble, you can take the cash route and make a huge investment all at once. While this may result in a huge payoff, you should definitely consult with someone first unless you are an investment guru.

Conclusion

At the end of the day, only you can decide whether or not you should sell your structured settlement payments. You need to carefully consider your financial situation and your want and needs before making such a huge decision. You need to recognize that there is a difference between what you want and what you need. They are two very different things.

If your settlement is fairly negligible, it may be a good idea to take the cash option, but if it is a major source of income, you may be best served by holding onto it. Many people will talk to a financial advisor before making such huge leaps, and this is a very good idea.

Financial advisors can crunch all the numbers for you and lay it all out on the table in front of you. They can tell you whether or not cashing out is a good idea at this time. So yes, cash for structured settlement payments is possible, but you need to go over all your options in your head and with a qualified professional before making your choice.

 

Cash Payments or a Structured Settlement?

In traditional settlements, compensation for damages has usually consisted of a single cash payment. Alternative arrangements know as structured settlements were created in the 1980's. Under these arrangements the beneficiary would receive cash structured settlement payments on a periodic basis. This guaranteed stream of annuity payments could be paid over a period of months, years or a complete lifetime.

Selling Future Payments

Many individuals receiving a stream of monthly payments under a settlement agreement don't realize that they can sell all or a portion of their annuity payments and be paid a cash sum. Access to this money could provide funding to meet the current life needs of your family instead of waiting for a future stream of inflexible payments structured over a period of a year or more.

This process of entering into a contract to sell ones legal right of receiving future structured payments to settlement companies in exchange for the present value of the money is called factoring. A large number of companies now offer cash for a structured settlement payment. When evaluating your options, try to work with financially sound companies that are competent and ethical.

How to sell a structured settlement payment

Individuals who choose to sell their structured settlement either in part or wholly are in need of some ready money. Most often, people sell a part of their structured settlement to meet near-term requirements. There are various institutions that buy structured settlements.

The transactions can vary in amount from ten thousand dollars to 1.5 million dollars. More than two-thirds of the states in the United States allow individuals to sell structured settlements. According to the federal law HR 2884, annuity owners do not come under any tax obligations as a result of selling their structured settlements.

One should research about various settlement purchasers, check their past payment records and their working relationships with the insurance companies so that the transactions can be approved quickly. Also, the purchasers should be licensed, insured, and bonded.

This way if a purchaser goes out of business, the seller can still get his cash. In some states it is mandatory to obtain financial and tax advice, in other states an annuity seller needs to sign a waiver if he does not want to take recourse to financial advice. However, it is compulsory to take advance approval from court according to federal and state laws. Companies that purchase a settlement payout without the advance court approval face a heavy tax.

A judge studies the circumstance of the potential transactions to assess whether the seller actually stands to benefit from the transaction and weighs the effect of the transaction upon the seller’s dependents. Often, owners of structured settlement payments cannot raise credit by other means and have to sell off parts of their settlements.

The judges are aware of this and do not object to the transactions so long as the owner is able to show a genuine need for the sale. The seller’s presence in court makes it easier for the judge to arrive at a decision. In an instance where a transaction is denied by a judge, purchasing companies take the necessary steps to create the conditions suitable for the transaction, a seller does not have to bear the costs of this process.

To obtain a free quote from a purchaser, one needs to provide information such as the state of residence, the insurance company, and the payments. If an individual is satisfied with the quote offered, he will need to submit copies of the settlement agreement and annuity policy.

The process of finalizing the contract starts with the purchasing firm sending a disclosure document to the seller; the document explains the terms and conditions that will govern the transaction. The contact is dispatched in a day or two, upon the contract being signed; the court order process begins and can take up to 90 days depending upon the state of residence and the insurance firm. Funds are made available to the individual within five to ten working days of the order being approved.