Structured Settlement Payments – How to Sell Structured Settlement Payments For Cash
Yes, individuals sell structured settlements every day. But there are several major reasons why you shouldn’t sell your future structured payments instead of keeping them because of a number of reasons. First, structured settlements often are a bad investment. Second, in many cases, you will never really receive the full amount you were expecting.
Why should you not sell structured settlement payments? There are three major reasons. The first reason is the discount rates. Some financial institutions are more likely to pay you less money than others which could mean paying out too much or too little. So by having a lump sum payment from a factoring company, you can keep more of what you are owed without having to pay out so much to start with.
The second reason to not sell your payments is due to the taxes involved. With most states, lottery winners must pay taxes on any income they receive over a specified amount. While some states only allow tax credit payments, such as welfare and Social Security, most states require lump sum payments. This can be extremely expensive, especially if you are currently paying taxes. With most factoring companies, your monthly cash flow is completely tax-free.
Thirdly, you will want to consider the present value of your future annuity. A financial advisor can look at your annuity and project what it would have paid out at different points in your life. He can also give you an idea of how much it would cost now to replace it. While this is a good way to save money, you still need to remember that the future is unpredictable. So before selling your payments, it is a good idea to talk with a financial advisor just to make sure that you are not putting your nest egg at risk by selling something that will not return a profit.
Fourth, you could decide that you would rather keep your annuity. If you do this, then you should talk with your financial advisor about any immediate needs that you have, whether medical or other. He can tell you if it is better to keep the cash in place for a rainy day, or if it is better to sell Structured Settlement payments for a lump sum of cash. You should also research the interest rates on selling your future payments; you may get a better deal if you sell the payments for less than what you are going to pay over the life of the annuity.
Finally, you can also sell Structured Settlement payments for cash. For most people, the lump sum they receive is more than enough to payoff their bills and live comfortably. However, if you need extra money now more than ever, selling your payments for cash may be your best option. Whatever your reason for selling off your payments, you will be able to have a large chunk of change immediately.