News and Tips on structured settlement transfers.

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2
Mar 11

So You Want to Buy Structured Settlements

You’re tired of the low rates and returns available on traditional investments. You’re looking for a better place to put your money that’s not too risky. And then you learned about structured settlements, and thought about buying them. If so, consider a few things.

Got Cash? You’re going to need cash to pay off the holders of structured settlements. If you just happen to have lots of cash on hand, great – just remember that once you’ve paid the annuitant, you won’t be earning interest on the funds. If you don’t have cash on hand, how will you get access to it? What sort of interest rate will the lender charge you? Can you fit that interest into the discount rate?

Discount Rate. This is the figure at the heart of every structured settlement factoring transaction. The discount rate is “reverse interest” that you charge the structured settlement holder in order to cash them out. So, you will be paying them quite a bit less than they would have received over time. The discount rate is intended to cover your costs, as well as your profits. But don’t be tempted to make that rate too high, even if you think the buyer will accept your offer – a judge will have to approve the sale, and may not consider it reasonable.

Legal Help. The structured settlement factoring process is regulated by specific laws that vary from state to state. Unless you’re a lawyer, and very comfortable with the structured settlement process, you’ll probably want to hire one to help you draft your contracts and guide you.

Getting Noticed. There are lots of structured settlement factoring companies around, but a few big names dominate the market by their ability to advertise widely and through volume. You will need a way to get yourself noticed. A site like QuoteMeAPrice is a way to offer a deal to prospective sellers, and perhaps offering a better deal than the big guns is one way to get noticed. Still, the big players have history on their side. So, don’t expect instant success.

The Risks. Most structured settlements are administered by insurance companies, so there is little risk that a stream of payments you have assumed won’t get paid. But there are plenty of possible roadblocks that can prevent you from sealing the deal. The seller may change his mind and move to another buyer if he gets an offer for more money or faster turnaround. As noted earlier, a judge can nix the whole thing. And every state offers a “cooling off” period in which the buyer can walk away from the deal, in which case all your work and sunk costs will be lost. So, you want to buy structured settlements?

If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.

23
Feb 11

Structured Settlement – Fact vs. Fiction

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.

20
Feb 11

The Structured Settlement Process – What You Should Know

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.

18
Feb 11

Why Should I Keep My Structured Settlement?

The ads sound incredible. Sell your structured settlement now and get cash fast for whatever you need: paying bills, investing elsewhere, starting a business. But even though it may seem much less sexy to keep your settlement, there are some good reasons to do so.

Income. One reason why structured settlements are so frequently used to settle personal injury cases is because they provide for a steady stream of income to the plaintiff. You are guaranteed a fixed income for a period of months or years that you can use to meet everyday expenses. If your injury has left you unable to work temporarily or permanently, the settlement is, essentially, your income.

Guaranteed Return. Structured settlements are almost always based on annuities. The defendant put a lump sum of money into an annuity which is invested so that it earns a fixed rate of interest. This interest, when combined with the seed money, is able to pay out your settlement in identical payment over the course of months or years. Don’t fall into the trap of believing that you can somehow do a better job on investing this money. Insurance companies – who are usually responsible for administering annuities – have experts on staff with the training and time to devote themselves to investing the seed money. If an “investment advisor” or “financial advisor” is promising they have a lead on a “sure thing” that will get you a better rate of return, walk away.

Safety. One reason structured settlement buyers love these transactions is because of their relative safety. Since insurance companies usually manage the annuities that pay your structured settlement, there’s virtually no risk of default as long as the insurer stays in business. And, often, structured settlement funds are maintained in a protected fund, so payout is still assured no matter what happens.

The Whole Enchilada. Let’s say that your structured settlement pays you $50,000 per year for 10 years, for a total of $500,000. If you decided to sell that settlement, the amount you get will be less than $500,000 – a lot less. That’s because companies that buy structured settlements are in the business to make a profit, not to help you. To ensure they make their money, they have to pay you far less than what they’ll get from your settlement over time. If you have a truly urgent need, a real emergency that your structured settlement will solve, selling it could be an option worth pursuing. But if there is any other way for you to get by, selling is not a good deal.

17
Feb 11

The Structured Settlement Seller’s Decision Guide

So you’ve got a structured settlement…and a need for cash. Sure, selling is one way to get money, but is it the right choice for you? Here are a few tips to help you decide, and help you through the process.

How Much Money do You Need? You don’t have to sell your entire settlement – buyers will happily take one or a few payments.

Do You Really Need the Money Now? Is your “emergency” for real? Is it your emergency, or is it just a family member or friend trying to get a loan?

Do You Have Other Options? If you are looking to pay off medical bills or credit cards, can these debts be negotiated or cut down some other way? What about other sources of funds for the money you need, such as a bank loan, drawing from retirement or investment accounts, or borrowing from friends and family?

How Do You Plan to Spend the Money? Will this cash solve a problem – such as medical bills – completely? If so, selling your settlement might be a good idea. But if it will pay only some of your medical bills or credit cards, and the debts are going to keep coming, selling your settlement may well be a waste of time. And if you’re selling because there’s some great new investment that you want to make, really think twice; it’s rarely a good idea.

What Are You Giving Up? Any structured settlement buyer is going to pay you far less for your structured settlement than you would have received over time. The buyer applies a discount rate to the stream of payments you are selling to determine how much he’s going to give you. Consider whether you really can give it up, and whether you really want to.

How Will You Survive? One of the reasons structured settlements are created incident to a personal injury lawsuit is to provide the injured party a means of income. This is especially important if the injury has left you unable to work for an extended period of time, or permanently. If you sell your structured settlement, how do you plan to provide for yourself without those payments? How will you pay your medical bills? If you don’t have a good backup plan, explore other options.

This is a big decision, so think long and hard about whether selling is your best option. Most states will require you to get legal and/or financial advice, and you should definitely do it – these folks can give you an objective opinion on whether selling is right for you.

15
Feb 11

What’s a Good Discount Rate for my Structured Settlement?

The short answer is: whatever you’re willing to pay.

Here’s the longer answer. The discount rate is what a structured settlement buyer uses to roll back your stream of payments to the lump sum he is going to pay you. You can think of it as reverse interest. When you borrow money from a bank, you pay interest for the privilege. When you sell your structured settlement, you are giving up a portion of it for the privilege of getting your cash ahead of schedule. This discount rate is intended to compensate the buyer for overhead expenses, interest he loses on the cash he is giving to you, the time he has to wait for his money, and, of course, profit.

Discount rates charged by structured settlement buyers can easily be in the double digits. Remember to shop around for competing offers, a process that sites like QuoteMeAPrice make easy. Check each offer for its discount rate, as well as the turnaround time (how quickly you’ll get your cash) and any other fees the buyer may be trying to charge you.

You may want to consider whether you truly need the cash, and why. Is this a true emergency? Is there some other way to get what you need without cashing out your structured settlement? If it is a true emergency, ask yourself if there is some other way you can get the money you need without sacrificing your structured settlement.

As part of the structured settlement factoring transaction (that’s the official term for selling your settlement), most states will require you to get legal and/or financial advice, and that’s a good idea. Not only can these professionals tell you if the discount rate you’re being charged is reasonable, they may be able to present you with alternatives to selling your settlement that you didn’t know existed.

Another part of the structured settlement process will require a judge to sign off on the factoring transaction. The judge will need to be convinced that this sale is in your best interest, and this is not a certainty. If the discount rate is too high in the judge’s opinion, s/he may nix the deal. However, structured settlement buyers know that this can and does happen, so they will likely keep it in mind when they make offers to you.

Even after all is signed off, there is still one final opportunity to change your mind. Every state’s structured settlement process provides for a “cooling off” period, usually a few days, which will allow you to walk away from the deal. Again, selling your settlement is a big decision, and you should take this final opportunity to decide if it’s really for you.

14
Feb 11

Why Now is the Time to Cash Out Your Structured Settlement

You may have been debating for some time when, or whether, to cash out your structured settlement. If you want to go for it, now could be the best time to do so, and here’s why.

Low Interest Rates. You may be wondering what low interest rates have to do with you and your structured settlement. Well, nothing directly. But, the companies that buy structured settlement love the current low interest rate environment, because it allows them to secure the financing they need very cheaply. Interest rates are at historic lows, and won’t stay there forever. Once they start creeping up, structured settlement buyers will need to make up for the higher interest cost somehow, and a higher discount rate to you – the money you give up so you can get a lump sum now – will eat into more of your settlement.

While you may decide that you don’t care, that you’ll accept a higher discount rate as the cost of doing business, the judge reviewing your case might not be so inclined. If a judge reviews your case and decides that a too-high discount rate is not in your best interest, he might turn down the deal.

Regulatory Environment. There always seems to be talk of revamping the legal process for structured settlements, but do an Internet search on this topic and you’ll find more chatter than ever. 2010 was a great year for structured settlement companies, and, as a result, they’ve drawn increased scrutiny for everything from business practices to the discount rate charged. Should there be a groundswell of interest in changing the whole structured settlement process, you may find yourself with fewer options than before.

The Perfect Storm. As the world climbs out of recession, consumer spending is up, and there’s plenty of talk about the “I” word: inflation. Even if inflation doesn’t grow out of control, prices for everything seem to be rising, so structured settlement buyers will have to pay more for office help, cash flow, legal assistance, and everything else. Sure, the buyers can raise their discount rates to make up for it, but if the deal takes too much out of your settlement, the courts can start rejecting the deals. Faced with the inability to make profits to sustain their businesses, many structured settlement buyers may choose to – or be forced to – get out of the structured settlement business. This could result in fewer choices for you.

9
Feb 11

Should I Invest in Structured Settlements?

You may be frustrated at the generally low interest rates being paid on most conventional investments, and are looking for something else.

The structured settlement industry had a great year in 2010. If you’re looking for a huge rate of return, purchasing structured settlements might be a way to make your money work harder for you.

Structured settlements take many forms, from personal injury lawsuits to lottery awards. But the basic premise remains the same: A lump sum is placed with an insurance company, who invests the money so that it will earn enough interest to make a fixed stream of payments at some time in the future. Lawsuit defendants love structured settlements because it allows them to set aside less than the court-ordered settlement amount, and also gets rid of the responsibility of managing the money and the payments.

For the annuitant, the chief benefit of a structured settlement is the peace of mind in knowing that a steady stream of income will be coming their way.

However, because of impending foreclosure, medical expenses, or some other reason, an annuitant may decide he no longer wants to wait for his money, and he wants to sell. If you’d like to get in on that action, what should you do?

Have some cash. You’ll need a stockpile of cash in order to pay the annuitants for their payment streams up front. If you don’t have the cash available, you’ll need a good financing arrangement that will allow you to get it when needed, and creditors who understand the business of structured settlements.

Know the Law. All states have laws governing the sale of structured settlements, designed to protect the annuitant from charlatans who would purchase his annuity too cheaply. If you’re serious about buying annuities, you’ll need a good lawyer with an understanding of the process in your state. Realize that sellers of annuities are encouraged to get legal and/or financial advice, so if you try to take advantage of a potential seller, you might wind up empty-handed. Even if the seller signs off, a judge can always nix the deal if you’re trying to get too much for too little.

Discount Rate. And that brings us to the discount rate. Structured settlement buyers (that’s you) discount the total amount of the payment stream in order to determine how much you’ll pay the seller. While this rate is often in the double digits, don’t think you can set any rate with impunity and expect the seller to accept it because he is desperate. Even if he does, the court can reject your offer.

Know the Players. A site like QuoteMeAPrice gives you a great forum to shop your best deal to prospective buyers. But understand that you may have to float a better deal to get past some of the big players in this market. There are big names and they have big reputations; even though there are complaints against them, sellers have heard of them, and that name recognition is huge. So, you may have to make better offers that aren’t profitable just to get noticed.

5
Feb 11

Structured Settlement Concepts – What’s a Factor?

If you plan to sell your structured settlement, the official name for this is a structured settlement factoring transaction. The factor is the buyer of your settlement.

Factoring – where a buyer purchases the right to receive future payments from a third party – happens in lots of industries other than structured settlements. Lots of businesses who need quick cash will sell their accounts receivable to a factor. The business gets quick cash, and the factor gets to collect from the customers.

Why would anyone do this? The answer is the discount rate. In any factoring arrangement, including a structured settlement factoring transaction, the buyer is not paying for the full amount of the future payments. Instead, he pays a reduced amount. By paying you less than what he will ultimately collect from the scheduled payments on your settlement, he makes a profit – and you get the cash you need sooner.

This reduction is called the discount rate. The discount rate that the factor applies to your stream of payments is, essentially, reverse interest that you are paying in exchange for the ability to get cash ahead of schedule. The discount rate is intended to compensate the factor for a number of things. First, he must secure the cash he needs to pay you off. That means he has to get financing from someone, and that financing costs money. Even if the factor has the cash on hand, by giving it to you he is missing out on the ability to invest that money elsewhere, so the discount rate compensates him for that, too.

Factoring is a business, and business involves overhead. Factoring businesses have offices, employees, and lots of costs to recover. Since the structured settlement process is strictly regulated and all states have statutes to cover these transactions, factors need legal help in navigating the legal system, and lawyers don’t work free. They need other people to cut the checks and keep the books, too. And, of course, the factor wants to make a profit; they are not in business to help you.

So that’s why discount rates are often in the double digits. Of course, you may not want to sacrifice that much to get cash quick, even if there is a reason for it. Even if you do, if the discount rate is too high, the court may not approve the transaction. You always have the ability to walk away from the sale during the “cooling off” period, and sites like QuoteMeAPrice allow you to understand the deal you’ll be making up front.

4
Feb 11

Structured Settlements – Winners and Losers

Wondering about the structured settlement factoring process? Wondering who comes out ahead when you sell, and who doesn’t? Well, here’s the scorecard.

The Winners

The Factor. The factoring company has two things to bring to the party: time and money. He’s got the cash to front you for your structured settlement. And he has the time to wait for the payments you sold to start rolling in. Since your payments are tied to a structured settlement, which are usually tied to an annuity issued by an insurance company, he’s all but assured to see the cash eventually. And when he does, the rate of return is far greater than any other stock or bond he could have bought. Yes, he had to pay for legal advice, and the cash he gives to you he can’t invest elsewhere, but there’s a significant payoff to be had. All he had to do was wait.

The System. Most states require you to get advice from a lawyer, and maybe also from a financial advisor, prior to selling. These folks don’t work pro bono. Whether you pay the fee or the factor does, they will get paid for their work. But hey, it’s valuable advice, and worth the investment.

You…Maybe. This depends on how much you got for your settlement, and what you plan to do with it. Factors charge a “discount rate,” sort of a reverse interest rate that you are charged in order to get your money ahead of schedule. You might be planning to pay off debts or start a business. If your debts are wiped out by the settlement, and no more bills are coming, great. If that new business takes off, great. If not, well….

The Losers

You…Maybe. Structured settlements are intended to provide you with a reliable stream of income over time. If the settlement came about because of a personal injury lawsuit, and your injuries have left you unable to work, the settlement needs to cover your living and medical expenses. If you sell, what will you have left? What will be there to take care of you?

It’s tempting to think that you truly need money now, and your immediate need may well be legitimate if you’re facing life-or-death medical expenses, or foreclosure. But check your options. Is there no other way out of your debts? Is there some other way to fund that new business that’s got you excited? Don’t trade your future for a quick fix.

Let Companies Compete to Buy your Structured Settlement!

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News and Tips on structured settlement transfers.

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Let Companies Compete to Buy your Structured Settlement!

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