Cash for Structured Settlements – How to Sell Structured Settlement payments? When you’re one of the many millions of individuals in the United States that receive periodic settlements from a structured or annuity insurance company and who are interested in obtaining cash for those payments… You may be wondering if selling your structured settlement is even possible. And if it is, how much money can you expect to get? Well…
To answer this question, it would be beneficial to understand what exactly a structured settlement annuity is. Essentially, structured settlement annuities (sometimes called annuities) are agreements that pay out a regular income for a specific period of time, often from 20 years to life. The reason that these agreements were created was to provide a means by which individuals could provide a regular tax-free income while maintaining the right to take their money out of the agreement at any time. In today’s world, these types of annuities can provide a lump sum of cash, but they usually won’t have any interest accumulated during that period of time. However, the potential for receiving interest from a structured settlement annuity does exist. And that’s why some people actually prefer to sell their payments instead of cashing them in to the bank.
Now, when most people think about sell structured settlement payments, they usually think of doing so with a financial institution like a bank. However, there are a few companies out there who will purchase the payments from you instead. However, these financial institutions will most likely only accept payment from a third party and won’t charge any interest on the cash you receive. While the factoring companies that purchase these payments will do so at a discount to you, the discount is minimal. In fact, many of these companies will only charge you a one-time very small fee for using their services to buy your settlement payments. So it would actually cost you more to sell structured settlement payments to the factoring companies than it would to pay the discounted price to the bank.
Why should you use the services of a third party when you can get the same cash even in better conditions? Well, the truth is that selling these payments to companies that purchase them gives you access to cash in a very real and liquid state. However, the discount you receive may not be enough to justify the fees paid to these third party buyers. This is especially true when the payments themselves are much higher than the value of the annuity. When you factor in the commissions of the factoring companies, as well as the discount they receive, it becomes clear that you really don’t gain much value from selling your settlement loans.
There are some cases in which you do gain a significant discount rate. For example, if the original face value of your payments was greater than the current market value of your structured settlement, you might be able to sell for a higher lump sum. However, there is no guarantee that you will be able to find a buyer who pays this amount today. In addition, if you have a large amount of debt, you may not be able to sell your payments for less than your total debt. Only a small percentage of all buyers will be willing to purchase this type of settlement.
You will need to provide all of the necessary paperwork and information to a qualified broker before allowing a Structured Settlement Purchasing Company to purchase your payments. This paperwork includes: Your financial statements, including your tax returns and the summary of your payments. It also includes copies of annuities and other financial documents related to your personal finances. Your lawyer will be required to sign this documentation as well. A broker will help you through the process and will provide you with answers to any questions you may have.