News and Tips on structured settlement transfers.

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Posts Tagged: structured settlement process


9
Feb 13

Choosing Between Structured Settlement Buyers

Though many structured settlements are set up through a judge, they are not set in stone. While a structured settlement payment plan may be right for some people, for others it may no longer be the best for their changing and varied financial needs. These people may have immediate needs for a lump sum, such as paying for tuition or taking care of past due bills and obligations. However, there are companies out there that will purchase your settlement, providing you with the lump sum of cash you need to remedy your situation. When you decide to look for a company to care for your financial need, there are several things you must take into consideration.

Shop Around

One of the most important things you must understand is that not all companies who buy settlements and annuities are the same. There are good, trustworthy companies out there, but there are also shady and unscrupulous ones, and it is important for you to be able to spot the differences between these companies to avoid making a grave financial mistake. How do you know who to trust? Comparing the companies, as well as their offers, is the key to making the best decision possible.

Important Criteria When Comparing Companies

When choosing the right company for you, there are several criteria you should think about before making your final decision. All offers must be legal in your state and jurisdiction, for example. You should also make sure your company is offering the greatest percentage of your annuity or settlement. Of course, you will not receive 100% of the money owed to you through these settlements and annuities, but you should be able to get most of your money without worry.

Of course, you may only want to sell a portion of your annuity or settlement, and there are companies who are happy to do this as well. This way, you can get the cash you need for your situation without giving up the steady and reliable income a regular payment provides.

Consider Hiring a Brokerage Firm

Utilizing the services of a broker can help you make those all important decisions regarding your settlement or annuity. Choose a broker with the knowledge and experience of years of customer service, and a reputation for doing what it takes to get people the offers that best suit their unique individual financial needs.

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.


30
Jan 13

Can a Structured Settlement Transfer be Blocked by the Court?

Many people rightfully think that the decision of how to best use their resources, like money, is theirs to make. This is especially true of annuities and structured settlements, although that might not actually be true. Many states have laws in place dictating how structured settlements are dealt with, especially transfers or sales. Can a court really block the transfer of a structured settlement? The most honest reply to that question is yes, the court can deny the transfer of a settlement, but there’s a little more to it than that.

A Little Investigating

You have to know about the history of the structured settlement brokerage industry to really know what’s going on. The predatory nature of some companies has caused many states and consumer advocates to hold a low opinion of structured settlement transfers. Preying on the desperate and needy, these companies convince them that the best option for their financial situation is selling their structured settlements.

Most states, however, now have laws on the books to protect consumers from these types of predatory companies. One of the immediate benefits of this is that all transfers or sales must go before a judge, who will determine if the transfer is in the payee’s best interests. In many cases, the judge denies the transfer, not allowing the sale to take place.

The Criteria for Denying a Transfer

The reasons for denying the sale or transfer of a structured settlement are many and varied. One of the most common reasons is that allowing the sale or transfer is “not in the payee’s best interests”. This can mean virtually anything, although there does seem to be mitigating factors. For example, there’s a good chance that the court will reject the transfer if the funding firm recommends that the payee seek legal counsel before entering into a transfer arrangement. The proposal will then be rejected if the court does not find proof of a real financial need on behalf of the payee.

Additionally, if the transfer is not deemed “fair and reasonable” the court may reject it. For example, chances are very good that they will not approve of the proposal if the funding firm offers a payout of only 50% of the total payments for the life of the settlement.

It is easy to see that there are many factors that could lead a court to reject the transfer of a structured settlement. Showing a real financial need, and working with a firm that’s offering fair terms, is your best defense against a court denying your sale.

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.


11
Nov 10

Five Important Steps Before You Sell Your Structured Settlement: Introduction

With so many companies promoting selling all or a portion of your structured settlement, you may find yourself considering this option.  Whether your structured settlement is the result of a worker’s compensation claim, personal injury, or property loss, the option to convert your structured settlement to a lump sum could becoming increasingly more attractive as a means to meet financial demands.  Unfortunately in today’s economic climate, many are resorting to options they might not otherwise have considered.  Before making the decision to sell your structured settlement, it is important to arm yourself with the necessary information to allow you to make the best decision possible for your circumstances.  As with most things, there are both advantages and disadvantages to structured settlements.  One of the advantages is that the settlement guarantees a specific amount to be paid over a period of time.  This not only protects you from rapidly depleting the settlement, but it also provides a dependable revenue stream over the course of the settlement schedule.  Conversely, the disadvantages include the inflexibility of not being able to access the money when you need it and the loss of potential investment returns.

Prior to 2002 the tax benefits of a structured settlement benefited both the company making the payments and the recipient as the payments made were tax free.  In order to protect the injured party, Congress granted these tax benefits to structured settlements as a means to keep the injured from prematurely depleting their recoveries.   In order to prevent the factoring transactions from undermining the policy objectives of the structured settlement, Congress passed HR2884 which resulted in Internal Revenue Service 5891 requiring all structured settlement factoring transactions be approved by a state court.  The Structured Settlement Protection Act imposes a 40% excise tax on the net sale of a structured settlement that does not meet the requirements of the state and federal statutes.  All states with the exception of Vermont, North Dakota, Wisconsin, and Wyoming have passed legislation regulating the buying and selling of structured settlements.   Over the next five posts, we will be discussing five steps that are essential before you commit to sell a portion or all of your structured settlement.

  1. Do your due diligence
  2. Seek legal advice
  3. Seek financial advice
  4. Decide what you are going to sell
  5. Seek the best offer

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.