How to Sell Structured Settlement Payments at a Discount
You need to sell structured settlement payments at a discount if you are planning to sell them. When buying structured settlements, some people try to sell them at a fair price because they do not know how much the cash value is.
How is the sale process done? Let’s start by considering the amount of cash you will be able to get for the settlement. Once this number is known, you can then decide the amount you will be able to sell your structured settlement payments in exchange for a lump sum or annuity payment.
The Discount Rate Affects the Present Value of Your Settlement: Discount rate is the highest annual discount percentage. Companies can offer you higher discount percentages at the lower or 10% range, or even up to the maximum 12%, but you may not realize that discount percentages in the six percent range are possible. If the percentage of discount is high, the present value of the settlement payments decreases significantly.
Discount rate is different from your current income. Some people buy structured settlements at the top of their income and sell them at low levels of discount. However, it is better to buy the settlement at a low discount percentage, because the annuity payments are a fixed value and are not affected by inflation or other changes in prices. Thus, when they get older, they would still have the same monthly payments if the discount percentage was high.
So, if you want to sell structured settlements at a higher discount percentage, you should buy them at a time when there is no inflation or other economic changes in prices affecting the present value of the settlement payments. Most of the companies sell their settlement payments at a certain time, such as every six to twelve months, every year, or every two years. If the company plans to sell the structured settlements at a lower discount percentage in the future, they will not sell them at the same time they sell the existing settlement payments.
In order to know when to buy or sell structured settlements, you should do your homework and get as much information about settlement payments before you decide to buy or sell your payments. You should consult with an expert, either a financial advisor or your lawyer, who will help you decide on which time to buy or sell your settlement payments. and the right amount to buy.