Your Structured Settlement’s Value

Remember that most structured settlements paying out a set amount of monthly or yearly income over time were designed to provide you a maximum rate of return with a minimum amount of risk. This is why there are so many organizations that want you to sell structured settlement payments to them. If you make it obvious to them that you are really desperate for cash, they will offer you a lowball deal. Do not look desperate and take the time to shop around until you get a really good offer.

Selling Structured Settlements vs. Getting a Loan Against Them

A lot of people have discovered that they can get a loan against the value of the structured settlement. You are sure to find a number of local bankers who are willing to work with you. This is often the best option for those who are working or have other cash flows. The interest rate that your structured settlement is paying may only be a little less than the rate you will have to pay against the loan.

If you do not need all the money that you can get from selling structured settlement payments, you can exercise the above mentioned option with your banker and use the bulk of the money to buy income producing real estate or invest it in some other secure financial instrument. Doing so will further reduce the cost of the loan and, in rare situations, can even result in a profit.

By being smart and patient in talking to more than one professional you will be able to plan and execute the best financial moves.

There are a lot of dishonest operators around looking for people to scam. Do not make a hasty decision simply because you have a urgent financial need. Your creditors will wait no matter how much they try to persuade you that you need to pay your bills now.

What price is too low? Which company is reliable? Can I sell just part of my settlement?

These are just some of the many questions that arise when considering selling your structured settlement. Here are six tips to consider before you sell structured settlements.

Things to Consider Before You Sell Structured Settlements

1.    Search for specialty finance companies (such as Woodbridge Structured Funding and JG Wentworth) that are able to purchase your structured settlement. Be sure to research their reputation and testimonials – what clients (past and current) say is invaluable.

2.    Do not accept the first offer to purchase your policy. Why? Browse multiple companies to make sure you’re getting the most value for your settlement.

3.    Evaluate your current financial standings, and then decide whether you need to sell all or part of your structured settlement.

4.    If you can’t understand the legal jargon, consult an attorney. Make sure you understand the documents and any tax ramifications that occur when you sell structured settlements.

5.    Evaluate your financial obligations that will accrue in the future. Re-consider whether selling all or part of your structured settlement will be beneficial for you. Also, consider how accessing your assets will affect your income.

6.    Before you sell structured settlements, be sure that the company you’ve chosen addresses all legal ramifications. As much as possible, go for a company that does the most – if not all – of the work needed to get court approval.

Companies that purchase structured settlements and annuities profit by giving sellers huge lump sums that are actually smaller than the discounted face value of the payments.

Because of the abuse of some structured settlement buyers, a tax treatment favorable to structured settlement sellers has been adopted

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Courts Want to Be Sure That Your Selling Is a Good Move

The transfer of a seller’s structured settlement payment rights requires the annuity brokerage or factoring company to file petitions in the county where the seller lives. To approve the transfer of payment rights, the court must determine if:

1.    the transfer is in the best interest of the structured settlement seller, taking into account the welfare and support of the seller’s dependents;

2.    the seller has been advised in writing to seek legal and financial professional consultation and either has received counsel or decided to waive it;

3.    the seller has received the disclosure forms;

4.    the transfer of payment rights will not interfere with court orders;

5.    the seller understands the terms of the transfer agreement and disclosure form; and

6.    the seller is aware of his/her right to cancel the transfer but still wants to proceed.