How to Sell Structured Settlement Payments For Cash
Based on recent news regarding the secondary marketplace for structured settlements, you already know that transferring your remaining rights under your existing structured settlement annuity is perfectly legal. However, if you’re selling your structured annuity, involving a broker or a dedicated annuity specialist who specializes in these hard life financial scenarios is highly recommended prior to you actually shop around for a bid. In the event that you choose to sell before you’ve fully explored all of your options, the result can be a loss for you. When a buyer decides to take a loss at the auction, they may not have a position in your original settlement agreement. It’s important that you thoroughly understand your agreement before signing on the dotted line.
You may choose to buy structured settlements if: you anticipate a lump sum payment that will substantially exceed your monthly expenses, or if you anticipate receiving a stream of monthly payments over a reasonably long time frame. In either case, you must first explore the reasons why you anticipate a sale before you initiate any negotiations. While it’s not uncommon for buyers to walk away from a deal when they find no long-term upside, some people sell structured settlements simply because they are interested in paying less than the current market price for the same payments over a longer period of time.
In order to sell structured settlement payments for cash, one option available to you is to create a cash note. In this scenario, you would need to provide a personal guarantee to a lender to receive cash based on the amount of the structured settlement monthly payments. You should keep in mind that this arrangement is considered a risk by mortgage lenders and you may not qualify for a loan if you don’t provide a substantial guarantee. If you’re not certain about the risks associated with this option, it’s best to obtain professional help to determine whether you’ll be able to sell structured settlement payments for cash.
Another way to sell structured settlement payments for cash is to use a transfer company. Transfer companies typically purchase your payments from the original settlement beneficiaries and then transfer them to another party. However, some transfer companies will attempt to take the entire annuity and sell it in one transaction. Before proceeding with a transfer company, it’s important to ensure the transfer company has the appropriate business license and is registered with the Better Business Bureau. You also want to make sure the transfer company has ample experience buying and selling future payments.
If you want to sell structured settlement payments for cash, the second option is to work with a discount rate factoring company. A discount rate factoring company buys discounted future payments from financial institutions and businesses at a discount rate. The discount rate is figured based on future interest rates and an agreed upon purchase amount. Factoring companies are able to buy future payments from businesses and other individuals at discount rates because they do not have the ongoing costs of maintaining a loan or paying interest.
When you sell structured settlements for cash, it’s wise to work with a discount rate factoring company that is able to buy your payments from you or your business. By working with these factoring companies, you’ll be able to keep most of the money you receive and avoid paying tax on the lump sum obtained. By making a small monthly payment, you’ll be able to get cash now instead of waiting years to receive your payments in a court order. However, before proceeding with a lump sum purchase, it’s important to weigh the pros and cons of buying structured settlements.