If you’ve been awarded structured settlement payments and are interested in selling, you’ve come to the right place. Today, there is around $5 billion worth of structured settlements.
These kinds of settlements have been around for about forty years. The premise of structured settlements is to maintain some protection for injured people. Keep on reading for everything you need to know about how to sell a structured settlement.
What Is a Structured Settlement?
Structured settlements get awarded to plaintiffs as a series of payments over time. Instead of getting one lump sum of money, you will get smaller amounts at the time, each period. There will be a specific number of years you will receive money.
Sometimes you can get a big first payment and then smaller amounts after that. An example would be if you get awarded $700,000, you may get $100,000 upfront. That could help with any expenses you’ve incurred.
After the initial payment, you could get $50,000 per year at the same time each month. That will last until you’ve got the rest of the money. That gives you income coming in that you can count on for a definite period.
Structured settlements can get designed in different ways. Sometimes you might start with a large first payment and then get smaller ones. In other situations, the reverse happens. You get a small installment, and then they increase as time goes on.
Should You Sell a Structured Settlement?
Many people think structured settlements are best because they may avoid tax penalties. Some types don’t come with tax penalties, so make sure you know the tax laws of your case.
Structured settlements can work well for giving you a known amount of money for a certain amount of time. You can set up your finances to match when you get your payment each period. Some people don’t want to wait to get the money they are due.
In waiting for the case to get settled, some people rack up high amounts of debt. That might be due to medical or living expenses, especially if they’ve been out of work for a while. When that happens, you can sell a structured settlement and get the money fast.
There are other things to consider as well. What if you have home repairs or car problems? Waiting to get a smaller amount of money may not be the best option.
Are there education costs to think about soon? You may have a child going off to college and need a lump sum to help pay for that. Whatever you need the money for, Rightway Funding on LinkedIn can help.
Financial hardships happen sometimes. That can be especially true where people have gotten awarded a structured settlement. It takes time to go through the process, and many people have expenses they were not ready to pay.
If you’ve decided to sell your structured settlement, you need to get approval from the court. The court will decide if you’re allowed to sell. That is usually a formality, as many people sell their settlements.
A judge must approve the sale. That action is to protect you from bad decisions and greedy structured settlement buyers. The court will likely want to know you have a good reason for selling so that no one takes advantage of you.
Structured Settlement Process
Once you decide to sell your structured settlement, there will be a court process. The structured settlement buyer will have legal representation at the hearing. You need an attorney with you to protect you and to make sure you understand everything.
You don’t have to sell all the money you get awarded. Some people believe it is an all-or-nothing deal. That is not the case, as you can sell the amount you need and leave the rest set up as structured payments.
When you find a buyer, make sure you know how much money you need. That will save you time for negotiating and going over possible incorrect fees. Structured settlement companies buy different amounts.
There are many structured settlement buyers, so check rates and fees. Some may fall lower than others. Choose the one that is right for your financial situation.
If you need to sell a structured settlement, check reviews for different companies. You can contact them online or with a phone call. Make sure there are no hidden fees.
Structured settlement buyers can get you out of a financial bind, and the process won’t take long. You can get your money in a month or two in most situations.
You will get a smaller amount of money since it doesn’t have time to gain interest. That doesn’t have to hinder you, though. You can always invest the money and end up getting more in the long run.
Reputable buyers will work with you and they’ll be open about what you can expect from them. No matter what buyer you choose, you will sell your settlement at a discount.
The discount rate is the percentage your payments get discounted for each year. It will determine the present value of your settlement.
Discount rates can vary by company. Fair market value could be around 5%, but rates can go up to 18%. Get several quotes before you pick a structured settlement buyer.
Get Some Financial Advice
If you have gotten awarded money, you need to make sure you don’t make unwise decisions with your cash. A financial expert can look over the details of your structured settlement sale. Sit down and go over all the numbers and review what expenses you have right now.
Knowing what you need to pay will speed up the process of selling a structured settlement. The right company will help you move forward and put money in your bank! Be sure to check out our other articles for more financial tips and information.