The Advantages of Selling A Structured Settlement
People negotiating a personal injury or worker's compensation claim are most often offered by the defendant structured settlement agreement payments. Essentially, a structured settlement is enforced as a result of a court decision in favor of the plaintiff. The aggrieved receives periodic payments instead of a lump sum payment in exchange for the guilty party being forgiven of all future liabilities as a result of an accident or damage. The money coming from a structured settlement is guaranteed to the recipient and is most often spread out over years or even decades.
Benefits of Selling Structured Settlements
Despite the fact that structured settlement offers comfort and a sense of financial stability for a period of time, the frequency of payments are found to be problematic to recipients, especially those who may need a large amount of cash now. In this case, recipients have the option of selling their structured settlements altogether.
There are a myriad of benefits one can get from selling structured settlement. One obvious reason as to why a lot of recipients of structured settlement prefer to sell them is that of the waiting time. Some just don't have the time to wait around for the payments to come through. It is but practical to sell your structured settlement now as it undeniably offers a stronger sense of financial security than when money is received in small amounts for a long period of time.
Another great benefit of selling a structured settlement is that of investment. Despite the fact that structured settlements are absolutely tax-free and hardly depreciate over time, this may not hold true for many situations that recipients experience at present. This is especially true among recipients who were severely injured as a result of an accident. They may not have the ability to go to work like before, thus they seek to find opportunities that will enable them to earn a living despite their impairments. By investing money from selling structured settlements, recipients may dive into investment opportunities which in turn provide them bigger cash flow on the long haul.
Recipients often find themselves knee-deep in debt as a result of their injury and employment loss. In addition, past expenses that are related to their claims such as that of hospitalization, credit card bills , and mortgage payments may have accumulated over time. Once a structured settlement is agreed upon, recipients find it useful to cash out immediately. The lump sum payment can be used to clear the recipient of previous debts while having enough money to start anew and move forward as well.
Who to Sell Structured Settlements?
Once you have all the right reasons for selling your structured settlement, the next step in the process is finding parties that buy structured settlements. There are individuals and companies that specialize in buying structured settlements. Essentially, these organizations pay a flat rate now in exchange for the payments made through the structured settlement agreement. In the United States, this financial transaction is deemed legal and is offered in all states.
A structured settlement recipient needs approval from the court prior to selling it off to a company. The seller must meet certain criteria prior to approval. For one, the seller should be of legal age before such a transaction can proceed. In addition, the recipient should be of sound body and mind in order for the court to provide approval. Of course, regulations differ by state as some may not require court permission altogether.
When choosing a company to work with for your structured settlement annuity, it is important to perform thorough research and investigation prior to making any type of agreement. One important procedure that a recipient should not forget to do is do a background check on the company. It is crucial to look at a company's financial stability and reliability as well. You may also want to conduct interviews with past and present customers to check for the customer service aspect of the company. It is ideal to work with an organization that is relatively easy to deal with and boasts excellent customer support to their clients.
When selling a structured settlement, always bear in mind that the lump sum cash offer for your settlement almost always is lower than the total amount of money settled in court. For instance, if you were rewarded a total of 4 million dollars in a span of four years, it is clear to assume the structured settlement will payout a million annually. When this structured settlement is to be sold to a company, they may only offer a lump sum payment of 2 and a half million up to three million tops. This is basically how companies that buy structured settlements make profit. With this in mind, it is best to inquire from several companies.
Obviously, choose the company that offers the biggest payoff or that which offers the smallest difference from the original amount of payment awarded to the recipient. Experts recommend recipients to make use of online tools such as a structured settlement calculator in assessing which company offers the highest bid and the greatest benefits to you.
Always choose a company that features years of experience as a buyer of structured settlements. These entities also have the ability of assisting clients in sorting out documents. They will on the responsibility of preparing paperwork and processing for court approval. Bear in mind that the process of selling and buying structured settlements may take six up to eight weeks to complete. This gives you ample time to take all factors into consideration before making a final decision as to either sell or keep your structured settlement.
Before signing a contract, make sure to check all terms and conditions. Make sure to verify any information that you do not understand to avoid conflict once you receive the lump sum payment. Confirm if the company you are dealing with implements restrictions when it comes to the existing annuities to other businesses and private individuals too.
Lastly, before selling your structured settlement payments, make sure to seek consultation from an attorney or a tax professional so you become aware of both legal and tax implications of this financial decision.