Is It Safe to Sell Structured Settlement Payments?
A structured settlement usually pays cash payments out to an injured person in the form of an annuity over a period of time. This type of settlement was originally designed to replace a life insurance benefit that would be paid out upon the death of the policy holder. An annuity’s income stream is similar to a tax deferred annuity. In order to sell structured settlement payments for a lump sum amount, there are several requirements that must be met.
It is wise to first do your research on the internet so you can get a general sense of what a buyer is looking for when it comes to structured settlements. Once you have a general idea of what buyers are after, you will be ready to contact a broker or agency. To sell structured settlement payments for a lump sum, you will need to provide them with information such as the date of the injury, medical bills, and property damage as well as cashier’s check and other payment receipts. When speaking with prospective buyers, it is important to let them know how much you are willing to sell at what price. Since the purchase will be a cash transaction, they will require a high interest rate to cover their risk.
A buyer will purchase your structured settlements at current market values. They will use a formula to estimate your net worth, which is the difference between the total value of your injuries and the total value of your structured payments. The buyer will then require you to agree on a lump sum payment amount. While this can take several months to a year to complete, they will give you time to find a buyer and make offers. If you accept the offer they give you, they will deduct their costs from the lump sum you are given.
As with any transaction involving cash, there are many companies that buy structured settlements. They are called buyers because they purchase payments from people who no longer need the payments and are in dire need of the money. Since these settlements are already earmarked for you, there is little resistance to the sale and many companies will work with you on a good deal. In fact, many companies will pay you up to 70% of your future settlements.
There are many brokers and factoring companies that offer to buy structured settlements for a discount. When you approach a broker or factoring company, it is important that you have a lawyer review the offer before you sign or before you accept it. It is possible that the discount rates that are offered to you may not be the actual value of your settlement or you could be getting into a contract with a company that is in poor condition. The best way to prevent losing money is to only work with brokers and factoring companies that have been in business for many years and that are known for fair-dealing. You may also want to consider a company that gives you the option to sell your payments for a lump sum amount upfront.
Many of these brokers and factoring companies will also give you the option to pay off the remaining balance with a credit card, which can be done much easier than selling structured settlements on your own. The selling process is not difficult to complete, but it does take some knowledge of how the process works. You will want to understand the terms and conditions of the agreement so that you will know what to do if there is a problem with the sale. Selling structured settlements on your own can be risky and can affect your credit rating. By working with a broker or factoring company, you can rest assured that your payments will be safe. If you want to sell Structured Settlement Payments for a discount rate then you may want to consider a broker or factoring company that offers a range of options in this area.