Based on recent news about the secondary transfer market for structured settlements, you already know that selling your structured settlements is perfectly legal. However, if you’re selling your structured settlement, involving a lawyer or a structured settlement specialist who focuses on these kinds of issues is highly recommended even before you shop around for a quote. There are a number of reasons why you should seek professional help. For example, when selling, you should be aware of the current market value of your settlement so you don’t end up paying way too much. In addition, a specialist can review your case and provide advice on what would be best for you based on your unique circumstances.
There are many reasons why you might be interested in selling structured settlement payments. One of those reasons is the high discount rates that most companies are offering. These rates may sound good, but you need to ask whether the rate is reasonable based on the payment amount. What’s more, you should find out how the discount rates would affect the final price you pay, especially if you are being sold to a company that is not reputable.
The first thing you need to do before you decide to sell your future payment is research the market. Obviously, the easiest place to start is with the local telephone directory. Call up several companies and ask them for their discount factor and any other terms or conditions regarding the sale of structured settlements. You should be prepared to ask about such things as late payment penalties, which can amount to quite a bit of money over time. It’s also a good idea to find out what happens to the lump sum should you become delinquent on your payments for a period of time.
Some companies may tell you that you don’t have to worry about these things because you can’t get sued after making a sale, but that’s not always true. A person can be sued even after making a sale if there is a structured settlement in an accident or similar event. If you sell structured settlement payments, you must be prepared to face the possibility of owing a lot of money to a court in the event of such an event.
The second thing you need to know before you decide to sell structured settlement payments is how much money you can realistically get from selling the payments. Keep in mind that even though a discount rate may be lower than the going rate today, it will likely never be as low as it was just a few years ago. Since companies are trying to earn as much money as possible, they are often willing to take a lump sum in return for your agreement to sell structured settlement payments.
Depending on what company you go with, you could end up with anywhere from three hundred thousand dollars to a few million dollars for your lump sum. However, keep in mind that if a company has a large lump sum of money, they are less likely to charge you as much as they would if you sold small amounts of future payments. In other words, if you only need a small amount of money now and don’t foresee having large amounts of money at any time in the future, then you can probably save a large lump sum by selling structured settlement payments. Even if you find that you will have to pay a small percentage of the large lump sum if you sell, it will still be much less than the taxes and commission you’ll end up paying over the course of your lifetime on the taxes you’ll owe on your large lump sum of cash.