Sale of Structured Settlements

By David Millers
Selling structured settlement payments for a lump sum of cash sounds too good to be true, right? It's not. Many times it makes sense to forgo receiving future monthly payments in order to pay off medical or other bills or purchase a new house. But, as with any other financial decision, there is a lot to consider.

Before you get started, be aware that not everyone will be able to sell their structured settlement. The courts will decide whether or not you are eligible to sell based on the reasons you provide, the origin of the payments, etc. There are many factors involved with determining your eligibility. Economic instability may also make it a bad idea to sell, since receiving a guaranteed monthly payment might make more sense than purchasing a new car.

In order to decide if selling your structured settlement is right for you, take certain things into account such as your health. Your health and your ability to work and create an income when you have had an injury may be greatly reduced, making you dependent on the structured settlement payments to make ends meet.

Before you enter into a transaction, think of the impact of your decision for your future. For instance, you do not have to sell your entire settlement. You can choose to only sell a portion of it to take care of things that need to be addressed, while still receiving payments.

You should always have a lawyer review the offer from a settlement funding company BEFORE you sign. There are many consequences that you could face if you don't know the laws or the rules before you begin.
It is also advisable to have an attorney present when in court requesting approval for the sale of the settlement. A lawyer's role in this process is to make sure you understand everything that is occurring before it occurs so that you can make the best possible decision for your situation. Some settlement purchasers actually provide free legal counsel to work with you during this process.

As with any endeavor, shop around for the best deal. You should always make sure that you are dealing with a reputable buyer that will treat you fairly. Oftentimes, the lesser-known competitors to big names like JG Wentworth and Peachtree provide more favorable rates and terms as they don't have to spend as much on marketing.

Selling your structured settlement may be the best option you have for keeping your head above water and paying large bills that may otherwise drown you. Be sure to be diligent when looking into settlement funding companies to make sure you get a deal you will be happy with.

Purchase Structured Settlements

By David Millers
Companies that purchase structured settlements will buy out your future payments in exchange for advancing you money now, minus their fee. These companies can provide needed cash in a lump sum, far more than your monthly allotment, if that is what you choose to do, instead of staying on the monthly or yearly plan that your structured settlement sets forth.

If you have been involved in a lawsuit for personal injury, product defects, medical malpractice, or wrongful death of a family member, you may have mediated a settlement offer. Many times, since settlements in personal injury cases can be so large, the payouts are structured, or set up to be paid out in increments over time. This can be over several months, or years, and in some cases for a lifetime of payments. This amounts to a guaranteed income for the person who has settled their lawsuit for monetary compensation.

When a large sum is spread out over many months, or years, there can be some tax advantages, and it does assure the recipient of future income. By taking a large lump sum all at once, the person who receives it gets a large amount of money all at one time, with nothing set aside for future expenses. People who are hurt and have ongoing medical expenses will need a lot of money for their future care, and a structured settlement is good for that purpose.

Sometimes, however, the recipient has a good reason for wanting a large amount of cash immediately, instead of the smaller amounts over time. They might want to go to college, or buy a house, or have another good reason for needing some, or all, of their settlement money up front. This is a good time to consult the companies who purchase structured settlements.

There is a fee charged, from around 10 to 30 percent of the money advanced, and the transaction is similar to getting a payday advance, except for a lot more money, and the repayments go directly to the company that bought out your settlement. It is possible to have them purchase just a part of your settlement, so you get a lump sum now, and whatever remains would continue as before, but in a lesser amount. You would still get some future income, just not as much.

When deciding to sell a settlement, it may be necessary to obtain court approval. That is one way that the legal system acts on your behalf, to be sure you are doing this for a good reason, because the structured payment system was decided upon for a good reason also. Take time to examine several companies who purchase structured settlements before you take action. Oftentimes, smaller competitors offer better rates and terms than the big names like Peachtree and JG Wentworth.

Structured Settlement

From Wikipedia,the free encyclopedia

A structured settlement is a financial or insurance arrangement, including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative to lump sum settlements. Structured settlements are now part of the statutory tort law of several common law countries including Australia, Canada, England and the United States. Although some uniformity exists, each of these countries has its own definitions, rules and standards for structured settlements. Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlement payments are sometimes called “periodic payments.” A structured settlement incorporated into a trial judgment is called a “periodic payment judgment."