The details of the various steps of a structured settlement factoring transaction can vary a little by state, but generally the process looks like this.
First, shop around. Decide how many payments of your settlement you want to sell and get offers. Always shop your annuities to several companies. A site like QMAP makes this process very easy. It’s important not to disclose details of competing offers to the different companies you’re comparing. Also, check the reputability of the companies you’re considering. The Better Business Bureau is a great resource; if you see lots of complaints against a prospective company, reconsider.
Once you’ve signaled your acceptance of an offer, you will have to prove that the payments you’re selling are legitimate by providing a copy of your annuity policy or other supporting documents. The seller will then send you documents that spell out the terms of their purchase for you to sign. At this point, if you haven’t already done so, it is strongly recommended that you seek legal and financial advice regarding this transaction; some states even require it. Even after you accept the offer and sign all the documents, your state will likely require you to wait out a “cooling off” period during which you can change your mind.
At this point, the transaction will have to be approved by a court. Depending on your state, you may have to appear before a judge. The judge will look at the terms of the deal, especially the discount rate used to reduce the future payments you’re selling to the lump sum you will receive. Also be prepared to substantiate the reason for selling your structured settlement, such as medical or educational expenses, legal expenses, or repayment of debt.
The court-approved transaction will be forwarded to the insurance company to document the sale of your settlement. The buyer will then advance your funds to you.
The entire process will take somewhere around 45 to 60 days, depending on the state where you live. When checking the reputability of prospective buyers, you may find complaints that the buyer took longer to process the transaction than promised, and beware that some unscrupulous companies will drag their feet. Also, at each step of the process, re-check the terms of the agreement to ensure that the seller has not changed the amount of the payment or added in any fees – this is another common complaint against buyers.
Remember that selling your settlement is a very serious decision and shouldn’t be rushed. Give serious consideration to whether this is your best option.
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.
