News and Tips on structured settlement transfers.

Structured Settlements and Bankruptcy

Meeting everyday expenses can be difficult enough, but it’s even worse if you’ve been hurt in an accident and have medical bills and other expenses. This is one of the reasons why structured settlements are so popular in personal injury lawsuits. A defendant can set aside a lump sum of cash that is then put into an annuity and invested. The annuity makes regular payments to the plaintiff to help with those expenses.

But even with a structured settlement, you still may not have enough income to pay all your bills, and may find that you have to declare bankruptcy. If so, what happens to your settlement?

The good news is that most states exempt structured settlements from bankruptcy proceedings. So, even though your other assets – if you have any – might be at risk, your settlement will be intact.

This is not the case if you sell all or part of your settlement for a lump sum of cash. Once you do that, it is up for grabs if you happen to go into bankruptcy. Of course, it is more likely that you would spend the entire lump sum before going into bankruptcy. If this is the case, the money is gone, as is the structured settlement. This is one of the many reasons you should give long, hard thought to any decision to sell a structured settlement.

In addition to its protection from bankruptcy, you should also consider the other benefits of structured settlements:

Invested by Professionals. Structured settlements are usually administered by insurance companies, who have professional investment advisers working to put those funds where they will earn interest sufficient to make your payments. So, if an investment “expert” promises that you can do better by letting him handle your money, keep in mind that you already have a professional taking care of it for you.

Tax Advantages. As long as your structured settlement is for a personal injury (as opposed to punitive damages), it is exempt from income tax. So is the interest that is earned on your annuity. If you sell your structured settlement for a lump sum and then invest it, those interest earnings are fully taxable.

Spendthrift Protection. The periodic payments that you get in a structured settlement prevents you from spending all of your money too quickly. Most lump-sum payments are obliterated within five years, and the plaintiff is left with nothing. A structured settlement protects you from yourself.

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.

Structured Settlement Sales – Is Bigger Better?

If you’ve got a structured settlement and are considering selling it, you have hopefully used a site like www.quotemeaprice.com to get bids for the portions of your structured settlement that you are considering to sell.

Still, once you get those bids, how do you know which to choose? Do you take a slightly lower offer from one of the big players in the structured settlement market, or do you take a chance selling your settlement to a company that is not as well-known?

It all boils down to “due diligence.” Essentially, that means you have to do your homework to make sure a company bidding to buy your structured settlement is reputable, and whether you trust that company enough to give them your business.

Once you get a short list of companies bidding on your settlement, an easy way to begin checking them out is with a simple Internet search. Are there lots of articles about them? Lots of complaints? If there is absolutely no information at all, it could mean that the buyer is a brand new company; not necessarily a bad thing, but you have no history to go on. This is all starting information, and you need to go further.

Your next stop should be the Better Business Bureau. There, you can review complaints that have been made against prospective structured settlement buyers. Most companies will have some complaints against them, so the content of the complaints should be your focus here. Do the companies change the deal after the fact? Did they fail to pay up on their settlements? Did they sneak in hidden fees? This will tell you what red flags to watch for when you begin the sales process.

Another added check might be the state attorney, or some other regulatory that handles consumer complaints, to see if your prospective buyers have encountered problems in your state.

Even once you’ve selected a vendor, be it a major player or a start-up, you can’t drop your guard. Review carefully every contract and document given to you as part of your structured settlement sale. Talk to an independent attorney who’s had experience with structured settlement sales, and talking to a financial advisor is a good idea, too. Make sure this is a good deal for you, or at least the best deal you can get. And don’t forget – you have the “cooling off” period right after the deal is done where you can pull the plug on the whole thing, if you want to.

Marketplace / Sellers / Structured Settlements
19
Mar

Structured Settlement – Your Best Bet

You were injured and filed a lawsuit, or you won a lottery, or some other settlement, yet your benefits are being paid to you as a structured settlement. Why do you have to wait for your money? Why can’t you get it now?

Structured settlements actually got their start in Canada. They’ve become a favorite in personal injury lawsuits for a number of reasons. First, the plaintiff can pay a settlement to an insurance company that is less than the actual total lump sum settlement stipulated in court. How? Because the plaintiff puts a set amount of money aside with an insurance company, who then invests that money into a conservative investment whose rate of return generates the stream of payments that constitute your annuity. The time needed to grow that lump sum into your annuity is one reason why you have to “wait” for your money.

Another reason is your benefit. Structured settlements are intended to cover your living expenses for a period of months or years. Most people don’t have the discipline or investment skill to manage such a large amount of money on their own. So, the annuity lets someone else (the insurance company) manage the money, and the annuitant (that’s you) gets it – and spends it – only as needed. No matter what a “financial advisor” may tell you, you won’t beat the interest earnings on your investing without some special skill…or divine intervention.

Tax-free treatment is another big reason that structured settlements are so popular. As long as your damages come from your actual injuries, and not from compensatory or punitive damages, your annuity payments are tax-free. So, take that into consideration if you believe that your investment can overcome the return on your structured settlement. Anything you earn must beat both the insurance company and your tax rate.

If you truly don’t need this money, great – why not play with investing it elsewhere? But if you got it as a result of a personal injury settlement, and can’t replace that income elsewhere, selling should be your last resort.

Should you decide to sell, a site like www.quotemeaprice.com allows you to seek out bets from interested buyers quickly and easily. Buyers will tell you the amount they are willing to pay for all or part of your structured settlement. This allows you to get the best deal. True, you won’t get anything close to the amount you would have received over time, but if you are desperate for cash, you will be able to get more than if you called only one buyer.

Factoring Education / Sellers / Structured Settlements / Tips
18
Mar

Structured Settlement – Cash It Out?

The late-night ads beckon, promising a big lump sum settlement if you cash out your structured settlement. You’ll get cash now, or so they promise. Consider a few things before you sell.

How Will You Spend the Money? You may think that you have a serious emergency on your hands that justifies selling your settlement, but do you really? If you’re paying bills, can they wait? Or can they be negotiated? If you’re paying for repairs, is there any other way to take care of it? If you’re giving the money to friends or family, can’t they get the money anywhere else? Sometimes, with enough hard thought, you’ll find that money “emergencies” really aren’t.

I Can Beat that Interest Rate. Your structured settlement is likely being managed and paid by an insurance company, who received a lump sum (perhaps from a defendant in a lawsuit) and is investing it in conservative investments so that you will receive guaranteed payments over several months or years. These investments are likely very conservative and not earning a high rate of return, and you may have had financial “consultants” tell you that you can do better. The truth is, however, that you probably can’t, at least not without taking on a huge amount of risk. Also consider that your structured settlement is tax-free. If you sell it, and invest the proceeds, any money you make won’t be tax-exempt.

How Long Are You Planning to Live? Structured settlements are typically intended to provide the annuitant (that’s you) with a stream of income to meet your living expenses for a period of months or years. If you sell your settlement, that income will be gone. How do you plan to take care of yourself, especially if you don’t have a spouse to do it for you, or if you can’t work.

How Disciplined Are You? Selling your structured settlement will result in a lump sum of cash at your disposal. This isn’t necessarily a good thing. Even the most disciplined person would have difficulty resisting the temptation to spend a large amount of cash right away. Even if you’re disciplined, there’s sure to be a family member or friend with some “urgent” need that can be met with a “loan.” If you don’t have control over the money – that is, if it’s still locked into an annuity – you don’t have to worry about saying “no” to a seemingly legitimate need.

Factoring Education / Sellers / Structured Settlements
16
Mar

What Happens to a Structured Settlement if I Die?

It’s not a pleasant thought, but if you have a structured settlement, you may have wondered what would become of those payments if you should head to the Great Beyond.

The short answer is, it depends on how your settlement was designed.

If your settlement is set up so that it pays only while you, the annuitant, is still alive, then there will be nothing for your beneficiaries if you should make an early exit. Not surprisingly, this would be the structure of choice for defendants in a personal injury lawsuit, because it ends their liability if the annuitant dies. However, as you might expect, plaintiffs usually want more flexibility than this.

Another option for a structured settlement is to have the payment stream be fixed over a certain period of time or a certain number of payments. This may be called a “guaranteed period” or “period certain” because, even if the annuitant should die, the payments continue until the specified period comes to an end. If the annuitant is no longer alive, the remaining payments go to his/her beneficiary, or his/her estate if no beneficiary has been specified.

Yet another possibility is to structure the settlement to pay a “joint and survivor benefit.” In this case, the payments go to the annuitant, but, in the event s/he dies, the remaining payments go to a specified “survivor.” This would usually be someone like a spouse or child. Like the guaranteed period, it ensures that the structured settlement will be paid in full, even if the annuitant does not live that long.

Finally, your structured settlement may contain a “commutation rider” which provides for a designated beneficiary to receive a discounted lump sum payment in lieu of the remaining payments if you should die. Typically, the commutation rider will call for the beneficiary(ies) to get 90% of the remaining settlement if the annuitant dies; this is more than the beneficiary would likely get if s/he sold the payment stream to a structured settlement buyer.

So, should you sell your structured settlement now in order to make more money for your beneficiaries? Well, hopefully you and your lawyer had a long conversation about your anticipated needs before you even agreed to the settlement. But, even so, selling it is a major decision. If you should die, remaining payments made to your beneficiaries are generally tax-free. It’s difficult to discipline yourself from spending the entire lump sum if you sell, and any interest you earn on the investment of the funds is taxable – not tax-free, like your structured settlement.

Hopefully, you will enjoy a nice long life with your structured settlement payments. But take a look at your settlement agreement so that you understand what will happen if you’re no longer around.

Annuities / Factoring Education / Sellers / Structured Settlements
13
Mar

Structured Settlements and Kids

Unfortunately, bad things don’t just always happen to adults. When a child suffers a terrible injury and a lawsuit follows, the end result might be a structured settlement.

When the plaintiff in a personal injury lawsuit is a child, the court usually will put part of the settlement into a blocked bank account designed to pay current and future expenses. This bank account will remain restricted until the child reaches the age of majority (usually 18). Lawyers’ fees and other expenses will also be paid from the settlement. If Medicaid was used to pay some of the child’s medical expenses, they may also have a claim to part of the settlement (check with your lawyer about this). The remainder is placed into a structured settlement. Since a minor child cannot legally enter into a contract, the process of making the settlement binding is called confirmation, court approval, guardianship, or minor’s compromise proceeding.

Just like for adults, a structured settlement is typically a lump sum that is placed in an annuity that will invest the money then make a stream of payments to the annuitant (in this case, the child) over time. The idea of the structured settlement is to ensure that the child has a stream of income to meet his needs for months or years. This might be a lifetime if the child is permanently and totally disabled. Parents and attorneys for the child should review any proposed structured settlement carefully to determine if the amount of the settlement will be sufficient for the child.

But what if circumstances change and you need cash sooner than the annuity will provide it? It is possible to sell a child’s structured settlement, but it’s more difficult than selling one that an adult controls.

Structured settlements for minor children will often have a no-sale provision designed to prohibit its sale in a factoring transaction. Even with a no-sale provision, however, a court can approve a structured settlement sale if it can be demonstrated that there is a great an immediate need for the cash, and that the child’s needs are better met by selling the settlement than waiting for the next payment. You can expect, however, that the court will scrutinize a claim like this very carefully.

Once your child reaches adulthood and gains control of his settlement and that restricted bank account, the temptation to spend it all now will be immense, and it’s tough to expect an 18-year-old to have the maturity to know that he’ll need the money later. At this point, the best gift you can give your child is solid financial advice, maybe even the services of a financial planner, to help protect him when you aren’t around.

Annuities / Factoring Education / Sellers / Structured Settlements
08
Mar

Structured Settlement Sales – Understanding the Process

How does the sale of your structured settlement work? Here’s a quick summary of what you can expect.

First, find a buyer. You can use www.quotemeaprice.com to get competing buyers to bid on your settlement. You don’t have to sell your entire settlement; you can sell a portion or just a few of the payments you have coming to you.

Check out the bids you get, paying attention to all the details. You want the best lump sum, but watch out for any extra fees. Do “due diligence” by checking out the reputations of the prospective buyers. You can do this by going to the Better Business Bureau’s website and looking at what kinds of complaints, if any, have been submitted against the buyers. If you see lots of complaints alleging that the companies changed the original deal, snuck in lots of fees, or didn’t pay the lump sum as promised, these should be red flags. Also, beware any buyer who claims to be able to complete your structured settlement transaction in less than 45-60 days; all states have a legal process that must be followed, and it will take at least that long from start to finish.

Once you’ve picked a buyer, pay close attention to all of the contracts and paperwork you receive. Look for any changes to the original offer, and check the fine print for additional fees. If you don’t understand something, ask. If the buyer doesn’t sufficiently answer your question, tells you not to worry about it, or starts pressuring you to sign, you should walk away.

Most states require structured settlement sellers to get legal and/or financial advice. Make sure you find a lawyer who is independent – don’t take the buyer’s recommended experts or accept referrals from them – and who has handled structured settlement transactions before. Specifically, the lawyer should evaluate whether the sale is in your best interest, and should make sure the buyer isn’t trying to pass on fees to you that state law says he has to pay.

The sale of your structured settlement will have to be approved by a judge, and you may even have to appear in court for this. If the judge believes that the sale is not in your best interest, s/he can refuse to approve it, and you’ll have to start over again if you still want to sell.

Finally, you’ll have a “cooling off” period after the sale is approved before it is finalized. This is your last chance to re-think the whole thing, and decide once and for all whether you truly want to sell.

Annuities / Factoring Education / Marketplace / Sellers / Structured Settlements
07
Mar

Who Would Buy a Structured Settlement?

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.

Annuities / Factoring Education / Structured Settlements
05
Mar

Getting the Best Deal for Your Structured Settlement

OK. So you have a pressing financial emergency. You’ve considered all your options, and you realize that cashing out your structured settlement is the best way to get the money you need. So now what? You want to make sure you get the best possible deal. Here’s how.

Shop Around. Choose a site like www.QuoteMeAPrice.com where you can advertise the details of your structured settlement, and let buyers fight to give you the best deal. Let them really duke it out, and don’t jump at the very first offer. Sometimes, buyers will float a low offer just to see how quickly you’ll bite. Resist the temptation to accept the first deal you see.

Check Them Out. Not all buyers are created equal. You want a structured settlement factoring company that is going to treat you honestly, will stick with the deal they offer you, and won’t try to play games with you. Once you’ve gotten a list of prospective buyers from your bids at QuoteMeAPrice, check them all out on the Better Business Bureau. Virtually every buyer will have some complaints, but you should look at the nature and the amount of complaints. Are there lots of accusations of hidden fees? Changing the deal mid-stream? If so, maybe you should avoid that buyer.

The opposite extreme – no information available at all – can also be a warning sign. This could mean that the company is brand new to the structured settlement factoring business. While that isn’t a danger sign per se, you don’t have any history to consider, and no clients to ask. Proceed at your own risk.

Consider the Warning Signs. So, you’ve gotten bids. You created a short list. You did your due diligence. And now, you’ve chosen your buyer. But your vigilance shouldn’t end there. Read the deal carefully. Read all documents carefully, and ask questions about anything you don’t understand. If any part of the written documentation doesn’t agree with the deal you were offered, insist that the contract be changed. Also, take a hard look for any fees that you will be paying. Are these fees permitted under the laws that govern structured settlement factoring transactions in your state? Even if they are, every fee takes money out of your pocket – try negotiating them first before you sign.

Selling your structured settlement is a huge decision with a big impact on your personal finances. You owe it to yourself to get your best deal.

Annuities / Factoring Education / Structured Settlements
04
Mar

How Structured Settlements Work

The commercials are tempting, featuring funny people in silly situations promising to get you cash now. You wonder why you got this structured settlement in the first place. Why bother?

Structured settlements originated in Canada in the 1970s and grew quickly in popularity. Why? There are a few reasons.

First, defendants in a personal injury lawsuit realized they could invest an amount of cash smaller than the actual amount of the settlement, and, through careful and conservative vesting, actually meet the settlement obligation they agreed to in court. The defendants were free of their settlement obligation without the hassles of administering and paying the funds on a regular basis.

Second, plaintiffs and their attorneys realized that the structured settlement was a great way to ensure a steady stream of income to an injured person. Because the defendant was no longer involved, and administration of the payment stream had been turned over to an objective third party (an insurance company), the risk of default was lessened significantly.

If you are an annuitant – that is, a person receiving the structured settlement – this whole process may seem unfair to you. After all, you were awarded a certain amount in a lawsuit, why can’t you have it all now? Why do you have to wait? What if you have other things to spend it on?

In truth, the structured settlement guards against all that. Were you to receive a huge cash settlement up front, it would be difficult to resist the temptation to blow the whole wad at once. Even if you are the paragon of restraint, chances are some family member or friend or some other “emergency” would present itself, demanding the cash. A structured settlement protects you from all that.

If you were disabled, and are unable to work, either temporarily or permanently, a structured settlement is designed to ensure that you have cash when you need it and in the amount that you need. The payment schedule prevents you from spending it frivolously. The structured settlement, in effect, protects you from yourself.

Of course, you can sell it. You can sell all or part of your settlement for cash in about 60 days or so, depending on your state. Just know that you will not get the full amount of your settlement – not even close. Buyers will cut down the full amount in order to cover their costs and make a profit – and it’s your price to pay for wanting cash quick. It’s an option, but if you can wait, you probably should.

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News and Tips on structured settlement transfers.

Let Companies Compete to Buy your Structured Settlement!

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