3 Steps to Sell Structured Settlement Payments

Typically, when individuals sell structured settlement payments, they usually sell part of the future payments (typically 15 to 35 percent) in return for cash now. Individuals with structured settlements many times to sell all or some of their future annuity payments in return for a lump sum of money now. This sum of money is paid in a lump sum, usually at a discounted rate, in order to settle the settlement and make the recipient, the claimant, a beneficiary of the settlement. But, what are the details of selling these types of payments?

When an individual decides to sell a structured settlement future payment, one of the first steps is to find a reputable and properly licensed purchasing company to do the work for them. One way to select a reputable buying company is to ask friends and family for recommendations, check online, and call companies that are specifically mentioned as being able to purchase such payments. Another way to find reputable companies is to research brokers and companies and talk with their representatives.

There are two main factors to consider when trying to find a buyer for the structured settlement payments one has sold. The first factor is the present value of the sum of money being sold. In this case, the buyer will want to calculate the present value of the sum by taking the present interest rate, discount rate, and amortization schedule into consideration. A factor that is not often considered, but has a significant impact on the value of the payment is the factoring companies discount rates. These are companies that are in the business of offering to pay the holder of a structured settlement a lump sum amount in return for paying the holder of the remainder of the settlement in regular payments over a certain period of time.

Once the factoring company has given the lump sum amount to the seller of structured settlement payments, the transfer company will then make periodic payments to the holder of the annuity. The payment amount will be determined at the time of transfer. If the transfer company is paying the full amount to the beneficiary of the annuity, then the transfer company will give the individual cash in an escrow account until the individual’s death or until the total of all payments on the annuity reach the stated value at the time of transfer. If the transfer company is paying a percentage of the total payments, then the individual will receive a smaller sum at the transfer time than the total payments at the time of transfer.

Once the transfer has been completed, the person selling the structured settlement payments may request to receive some additional information. The person can request to get several quotes from different companies. He or she can do this by contacting each company individually or through an internet website. In either case, the process to sell the payments involves gathering multiple quotes, comparing them, and selecting the one with the best deal. It may take many calls or emails to find the best deal. Once the best deal is found, the individual may have to sign a contract for selling his or her payments.

The final step in selling structured settlement payments is getting the money to the intended recipient. The money should be sent via a wire or a certified money order so that it can arrive promptly. Some companies send the money by regular mail, so the recipient will know it arrived in a timely manner. Once the recipient gets the money, he or she will need to be paid immediately. Sometimes this is done automatically but most companies offer an option for the recipient to pay the individual directly.