News and Tips on structured settlement transfers.

If you’re desperate for cash, the ads promising quick cash for your structured settlement can be really tempting.  But keep a few things in mind before you decide to go ahead.

Think of What You’re Giving Up.  All structured settlement factoring companies use a discount rate to figure up what they will pay you for your settlement.  That means that the lump sum you will get in exchange for the payment stream you’re selling will be less than the total amount of the payments – sometimes a lot less.  The discount rate ensures that the structured settlement buyer’s costs will be covered, and also that he will make a profit on the purchase of your settlement.

What Will You Do When It’s Gone?  Once you sell your structured settlement, it’s gone.  Structured settlements are intended to provide for your living and medical expenses, so without it, how will you cover your needs?  If you have no other income and are not able to work, seriously reconsider how you will survive without your structured settlement payments.

Do You Really Need To Sell?  It’s easy to become convinced that you are desperate for cash when a large expense pops up.  But really consider what those expenses are.  Is there some other way to get what you need, or pay the bills?  If it’s a debt you wish to pay, try restructuring it or working out a payment plan.  If it’s something you think you need to buy, reconsider whether you really need that new car or vacation.  Even if you really need money, if selling your structured settlement won’t take care of the need once and for all (for example, if it’s only enough to pay some of your debts), don’t bother – you’ll be no better off and your structured settlement will be gone.

Not As Easy As You Think.  Beware structured settlement buyers who make the process sound fast and easy.  Even if everything goes smoothly, you won’t complete your sell in less than 30-45 days.  If you need cash faster than that, you are out of luck – no matter what the settlement buyer promises you.

The most important thing to remember is that a structured settlement is intended to protect and provide for you.  Structured settlement buyers are in business to make a profit, not to help you.  Before you sell, really give some hard thought to what your life will be like without the settlement payments.

Plenty of things can go wrong when you’ve decided to sell your structured settlement, and may even cause the sale to be cancelled altogether.

Change to the Deal.  Once you’ve chosen a buyer (hopefully you’ve shopped around on a site like www.quotemeaprice.com) and decided on a lump sum you will receive for the sale of your structured settlement, the buyer may try to change the deal.  This is a common complaint against structured settlement buyers, and should be a red flag to you to walk away.  Same goes if the buyer tries to introduce new fees that weren’t part of the deal to begin with.

Advice.  Your state’s laws will likely require you to get legal and possibly also financial advice from a professional.  This is meant to be an objective opinion as to whether the sale of your settlement is in your best interests.  If the lawyer or financial advisor counsels you against selling your structured settlement, they can’t stop you from proceeding, but you should seriously consider their advice.  They may be able to help you resolve whatever financial problems have caused you to consider selling, or help you come up with other options for raising money.

Foot-Dragging.  Structured settlement buyers are frequently accused of intentionally slowing down the sales process.  They may do this if they are trying to time their investments, if they’re trying to secure the cash that they will use to pay you, or if they are considering other deals. 

Naysaying Judge.  One of the final steps in the structured settlement factoring process involves putting your proposed sale in front of a judge for his or her approval.  The judge may review the sale and conclude it is not in your best interest to sell, especially if the buyer is charging a discount rate that the judge believes to be excessive. 

Cool It Down.  Even after the entire process is completed, you will still have a “cooling off” period during which you can choose to nix the entire deal.  This is your last chance to think hard about whether selling is right for you.

No Payment.  As terrible as it may seem, there have been instances in the past where a structured settlement factoring transaction was completed, but the buyer was short on funds and did not pay the seller.  If this happens, a reputable company should cancel the agreement, but there have been companies that have refused to cancel the agreement.  The end result is, the seller gave up his settlement and got nothing in return.  Your best defense against this is to do due diligence – thoroughly check out any prospective buyers to see if they’ve done this in the past.

The ads all promise “cash now!” but the truth is, the sale of your structured settlement is going to take quite a bit longer than that.

The process of selling your structured settlement will take, on average, 45-60 days to complete, depending on which state you live in.

Why the delay?  After all, isn’t it your money?  Aren’t you giving permission to sell it?

The answer is, it’s the law.  All states have statutes governing structured settlement factoring transactions.  As a result, there is a strict process that must be followed, and specific steps, often with specific waiting periods.

After you choose a buyer for your structured settlement (and hopefully you’ve used a site like www.quotemeaprice.com to shop around for the best deal), there will be paperwork for you to review and sign, and send back to the seller.  This is one reason for the delay.  Your state may also require you to get legal and possibly financial advice regarding the transaction, so you will need even more time to find these professionals and sit down with them to review your sale.  State processes require this so that you will get independent advice as to whether the transaction is suitable for you, and in your best interests.  Even if your state doesn’t require you to get this advice, you should do it anyway. 

Once all the contracts and agreements have been signed, and you’ve gotten professional advice, your structured settlement sale will need to be approved by a judge.  Depending on your state’s law, you may even have to appear in court.  So, this takes more time to get your court date on a docket. 

Once all this is done, most states grant a “cooling off” period during which you can change your mind and cancel the entire deal if you want to. 

While this may seem frustrating, especially if you need cash in a hurry, the entire process is designed to protect you.  Structured settlements are intended to provide for your needs over a period of time, so selling it should not be a light decision.  State processes are also designed to ensure that you get objective opinions (lawyer, financial advisor, and judge) as to whether selling your settlement is a good idea, and giving you the opportunity to think it through one last time.  So, no matter what a buyer promises, don’t expect to get cash at light speed.

Sure, you know why you want to sell your structured settlement – an emergency need for cash fast that can’t be settled any other way.  You may not like the idea of having to wait for your money, and at times like this, it can be pretty inconvenient.  So, why would a company want to buy your settlement from you?

Stability.  A typical structured settlement is backed up by an annuity, usually administered by an insurance company.  If your settlement was related to a personal injury lawsuit, the defendant placed a lump sum with the insurance company, who then put the funds into an annuity contract where they money would be invested in conservative holdings so as to generate a stable stream of interest.  That interest income, plus the initial sum, pays out to you over months or years.  Barring financial disaster for the insurance company and your annuity contract being unprotected, the company who buys your settlement is virtually guaranteed that the stream of payments he is buying will come through as planned.

Rate of Return.  If you’ve been shopping your structured settlement on www.quotemeaprice.com already, then you’ve found that buyers are offering you lump sums that are less than the total amount of your payment.  This difference is being caused by the discount rate.  It is essentially a reverse interest t percentage that the buyer uses to scale back the payment stream to an amount he is willing to pay you.  The discount rate is intended to cover the buyer’s costs, such as legal fees and administrative overhead, but it also contains his rate of return – his built-in profit.  After all, structured settlement buyers are not in business to provide funds to you, they are looking to make money.  If this seems unfair to you, remember that you are in need of quick cash and the buyer is essentially providing a service.  Also, just as if you were borrowing money from a bank that would charge you interest, there is a charge for getting your money ahead of schedule. 

Here’s the good news for you:  a site like www.quotemeaprice.com allows you to get several offers from competing buyers, and lets you choose the one that best suits your needs.  Of course, you don’t have to accept any offer, and you don’t have to sell your settlement if you don’t want to.  That’s why you should always weigh the decision to sell heavily, and get objective advice.

If you’ve been swayed by all the promises in those late night ads telling you to sell your structured settlement , read on.  You can’t always believe what prospective buyers say.  Here are some of the more likely promises you’ll hear.

Get Your Money Now!  “Now” is a relative term.  No matter where you live, and no matter what you’re promised, all states have laws that govern the process of selling a structured settlement, and the are specific steps that must be followed.  Depending on where you live, the sale will take at least 45-60 days from beginning to end, and can take even longer in some places.  Before agreeing to sell, become familiar with your state’s process to avoid a nasty surprise.  Beware any buyer who promises a turnaround sooner than 45-60 days.  If you need your cash sooner than that, you need to find another option.

We Pay More!  Well, maybe, but unless you compare offers among several competing buyers, you don’t really know how good their offer is.  Use a site like QMAP to solicit bids from several buyers, then do some comparison shopping.

Also, be on the lookout for companies that change their offers after the contracts are signed.  Part of your due diligence should include checking the Better Business Bureau for complaints against potential buyers, and many buyers have allegedly changed, or tried to change, their offers after the initial deal.  Sometimes a company will float a higher offer to get your business, only to change their minds later.  Or, they might pull the plug on the entire deal if something more lucrative comes along, or if they decide they’ve given you an offer that’s too high.  Alternatively, they might float a low offer in hopes that you’re so anxious for a quick sale that you’ll take it.

And always know that a buyer will pay you far less for your structured settlement than you would have received over time.  Buyers use a discount rate, often in the double digits, to decide what they’ll pay for your settlement.  So give serious thought to whether selling is your best or only option.

No Hidden Fees!  You should get a full and detailed description of the offer up front.  Plenty of structured settlement sellers have claimed that buyers took legal, processing, and other fees out of their settlements.  Check the laws in your state that govern the structured settlement factoring process to ensure you’re not paying a fee that the seller is supposed to pay.

If you have a structured settlement and are thinking about selling – or have already decided to do so – you need to understand the process that lies ahead of you.

Decide What’s for Sale.  You don’t have to sell the full amount of your settlement.  You can sell just a few of the payments that are coming to you.  Don’t let anyone tell you that you must fork over your entire settlement.

Get Bids.  Don’t just talk to one buyer, either.  Get competing bids for your structured settlement.  Sites like QuoteMeAPrice make it easy for you to post the details of your settlement, and then get competing bids from buyers.  This ensures you have the best chance  at getting a good deal.

Due Diligence.  Once you have a number of competing bids, consider the source.  A quick Internet search should produce at least a website for the company that’s made the bid, but that isn’t enough.  Visit the Better Business Bureau to see if anyone has filed a complaint against your prospective buyer.  If there are complaints, compare them to the number and type of complaints filed against other buyers.  No matter how great the offer, if your prospective buyer is being trashed all over the place for last-minute changes on the deal, or deliberate heel-dragging, perhaps you should consider someone else.

Look Over the Documents.  So now, you have chosen a buyer.  Look carefully over any documents that are sent to you.  Make sure the details in the documents match what you were offered online.  Make sure you understand every word of the agreement, and what could happen if the deal falls through; structured settlement buyers often pull out of a deal after making an offer.

Get Advice.  Your state will likely require you to get financial and/or legal advice for the transaction you’re about to undertake.  Even if you don’t want to hear what they have to say, listen.  They may have a better way for you to get the cash you need.  Or, they may point out that you have no other means of support, and so selling your settlement is a bad idea.  If these folks are on your side, you should listen. 

Go To Court.  A judge will have to approve your structured settlement factoring transaction.  Be prepared to explain why you want the money and what you plan to do with it.  Be prepared with a backup plan if the judge decides it’s not in your best interest and you need to try again.

Cool Off.  The “cooling off” period is your last chance, by law, to let your second thoughts talk you out of the deal.  Think hard about whether this is right for you.