If you receive structured settlement payments, you might have some interest in selling all or a portion of your settlement. How do you find a legitimate and trustworthy company that will buy your settlement? If your type in the words “structured settlement” on your computer you will get thousands of hits. It is not easy to figure out which of these “hits” are for real. Here are some simple guidelines to follow:
1. Look for a company that has been in business at least 15 years – this demonstrates that they are a sound financial company and have more likely than not been providing good service;
2. Look for a company that is a Better Business Bureau (BBB) member – this demonstrates that they take their reputation seriously;
3. Look for a company that lists its real address and phone number and is not just a web site
4. Look for a company that has completed 1,000s of transactions;
If you follow these rules you will find a reliable buyer for your payments that will be good to their word and whom you can trust.
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This post will discuss the reasons why states passed the legislation to allow the sale of structured settlements.
The primary reasons states were petition to enable this legislation is the fact that in some cases a families best interest were no longer being served by their settlement payments. In the majority of the cases structured settlements are set up to help the recipient to manage their money over time and enable them to pay their financial obligations on a regular basis. This is particularly true when the injured party is no longer able to work and generate steady income.
However, sometimes circumstances change creating new and different priorities that may require a more immediate need for cash. This is where structured settlements are inflexible and don’t allow the recipient to switch their original settlement from a structured to a lump sum settlement within the framework of the original agreement.
States passed legislation to allow those receiving settlement payments and in financial need to cash in their future payments. This was the birth of a new industry with companies guiding recipients through the process and converting their future payments into cash.
Popularity: 93% [?]
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Structured Settlements are set up to take care of an injured parties financial needs overtime. Often the injured party is not able to work or generating regular income. The structured settlement provides income to pay bills and living expenses.
While the majority of all structured settlements remain intact throughout the intended term there are times when a recipient may need a larger sum of cash. In these cases one can opt to sell some or all of their future payments for a lump sum of cash. Those that are in need can turn to a structured settlement purchaser that will buy their future payments in exchange for the needed cash.
However, there are some instances where a recipient needs cash but would be better off not selling their structured settlement.
1. Rely on payments for everyday necessities: If your structured settlement is your only source of income and is only enough to pay for bare daily essentials then it is recommended that you keep your future payments in tact.
2. Too few payments remaining: If your future payments are set to expire in the coming 12-24 months it rarely makes sense to convert those to a lump sum payment.
3. Payments are too far out (over 30 years): For example, if you are receiving future payments that stretch over 40 years you are able to sell the first 30 years of payments but not the last ten. The future value of money will discount these payments to a level that is too difficult to predict or make a fair market value exchange.
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The last post described the role and benefits the “primary market” plays in the structured settlement industry. Today’s post will focus on the secondary market.
The secondary structured settlement market helps those individuals that have received a structured settlement but have had a “life change” or pressing financial need for a larger sum of cash. Examples may be someone going through a divorce or having a child that will be entering college or the accumulation of debt.
When a recipient has an immediate need for a larger sum of cash then their settlement payments provide, they have the option of converting their future payments to cash.
The secondary market not only meets the immediate need for cash but also provides flexibility so that one can choose to sell some or all of their payments depending on their situation. If they choose to sell some of their payments they will receive a lump sum payment as well as some of their continued payments for the original structured settlement.
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When an injured party agrees to a structured settlement the payments they receive are tax free of both federal and state income taxes.
One myth is that selling your settlement payments will cause your tax status of the settlement to change. This is not true. When one sells some or all of their future payments for a lump sum of cash the money remains tax free. There are no negative tax implications to selling your structured payment.
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Life can change in an instant; just when you have everything planned out, a corner is turned and suddenly everything is different. The lesson of life is being able to take these twists and turns and do what you can to make it fit your new reality. When injuries occur, however, the future can certainly be challenging. Those who are involved in a personal injury case may receive a financial settlement. And in many cases such financial settlements are paid through the terms of a structured settlement.
A structured settlement is a financial arrangement through which the recipient is paid their money through a series of payments instead of all at once. Such payments may generally work for recipients for some time as they know when their payments will arrive and how much they can expect – certainly a benefit for budgeting.
However, if structured settlement recipients at some point desire or require a lump sum of cash, they may choose to sell all or part of their future structured settlement payments. Purchasing companies will take possession of the portion of structured settlement that recipients wish to sell; in exchange, the purchasing company pays the recipient a lump sum of cash - cash that can be used for education expenses or debt settlement that can change the course of a family’s future.
Popularity: 68% [?]
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The end result of a personal injury case may often be the creation of a structured settlement. Those claimants who are awarded a sum of money following a personal injury case may sometimes be given a lump sum, but sometimes they are given a structured settlement arrangement through which they receive payments on a scheduled basis.
Structured settlement payments are sent directly from a third party annuity that has been set up according to the terms of a settlement agreement. The responsible parties are held accountable for funding the annuity. The claimant is then sent their payments from the annuity throughout the life of the structured settlement.
While details regarding total amount, payment schedule, and payment amounts are decided upon at the creation of a structured settlement, there is still flexibility provided to the recipient. In fact, should a need or desire for a lump sum of cash arise – rather than the continued payment structure – the recipient can choose to seek the sale of their future structured settlement payments.
By selling all or part of their future structured settlement payments, recipients have the ability to procure a lump sum of cash through a purchasing company.
Popularity: 67% [?]
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Oftentimes following a personal injury case those a plaintiff can be provided with a structured settlement arrangement. A structured settlement is a payment arrangement through which the recipient is paid the financial award through scheduled payments. Such payments are sent from a third party annuity that has been funded specifically for this reason by the responsible party; and the payments continue until the culmination of the structured settlement.
While recipients may often feel that they are locked into their payment schedule, the reality is that there are several possibilities that are open to them. If the desire is to receive a lump sum of cash rather than to continue receiving payments, recipients may choose to investigate the sale of their structured settlement payments.
In fact, recipients can choose to sell all of their future structured settlement payments or they may choose to sell just a part of their future structured settlement payments. In return, a purchasing company will pay the recipient a lump sum payout according to current market value.
Popularity: 66% [?]
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Whenever we are in need of cash – for medical bills, debt payments, a housing purchase, renovations, education costs, etc. – we may turn to investments or savings to get the money that we need. In such times of financial need, however, it helps to keep in mind other, less traditional sources of cash – such as a structured settlement.
A structured settlement is often created following a personal injury settlement. Rather than the claimant being given the entirety of their settlement at once, they may be given a payment schedule known as a structured settlement. From that point on – throughout the life of the structured settlement – the claimant will receive scheduled payments.
However, a structured settlement can be a source of untapped cash for those who are facing particular financial needs. With the sale of future structured settlement payments, sellers can quickly have the cash they need in hand.
The process includes finding a reputable purchasing company that will pay cash in exchange for the structured settlement. Sellers are not even required to sell all of the structured settlement; rather, they can choose to sell partial payments or even a certain number of future payments.
Popularity: 84% [?]
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A personal injury case is a legal process that is the result of injuries sustained in an accident. When an injured party works with a personal injury attorney to seek financial amends for their injuries, the case can be settled out of court. However, if a structured settlement is negotiated the claimant may not be given the entirety of their settlement on the spot. Rather, they are given a financial arrangement that allows for the settlement money to be given to the claimant in payment installments funded by an annuity.
Because this is a case that involves injury, personal injury proceedings often result in enough funding to cover the inevitable medical bills. Oftentimes injured parties are not only faced with medical expenses associated with the accident and initial injury, but they are also faced with loss of wages, and ongoing medical expenses such as those associated with therapy and rehabilitation.
In most cases the payments received through a structured settlement will be adequate enough to meet these ongoing financial needs. But in the face of medical expenses – such as the need for a surgery down the road – the structured settlement recipient may find they are more in need of a lump sum of cash on hand.
In such a case, the structured settlement recipient may seek information on selling all or part of their future structured settlement payments so that they can have all the cash they need at their disposal. If approved by the courts, the structured settlement recipient can work with a purchasing company to exchange ownership of all or part of their future payments.
Popularity: 65% [?]
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