Individuals receiving payments from a structured settlement often need to convert the settlement into a lump sum payment for immediate expenses. There are many companies in the business of purchasing structured settlements in exchange for cash.
No matter how desperate a seller may be for cash, it is important to understand the basic process involved in cashing in a structured settlement. Despite the hype seen on television and written in print advertisements, selling a structured settlement is a multi-step legal process that can take 90 days or longer to complete. It is allowable in only two-thirds of all states. Many settlements are structured in a way to prevent any option of a sale at all. Some agreements, while allowing the possibility of a sale, make the sale process so difficult or cumbersome to complete, that the option is prohibitive or woefully inadvisable.
Assuming that sale is an option, the basic process is as follows:
- The annuitant, (Owner) of the settlement selects a buyer. After sending details of the settlement to the buyer, the buyer makes a preliminary offer. If the owner is satisfied with the quoted offer;
- The owner sends the requested copies of the settlement agreement, underlying annuity contracts and other supporting documentation to the buyer. Then;
- The buyer sends a contract and disclosure agreement that states the terms and conditions of the contract and agreement in the offer to the seller. Once signed;
- The contract, related agreements, and supporting documents are submitted to a court for approval. The evaluation process and subsequent issue of an order of approval can take up to 90 days or longer. Once approved, money can be available within 5 to 10 business days.
Deciding to cash in a structured settlement is a serious matter. The seller is best served by seeking the advice of legal and financial professionals qualified to assist the seller in making an informed decision. Converting a structured settlement has permanent consequences for the seller and his or her dependants. Selling a structured settlement strips away the benefits of that continuous stream of income. Long-term settlements are built to provide continuous income to individuals with permanent or chronic disabling conditions. Perspective sellers should carefully consider the consequences of removing this long-term financial safety net.
If a sale is truly necessary, the seller should, at a minimum, check the track record, financial stability and integrity of a potential buyer. Not all offers are equal. A prudent seller will shop around and compare several offers to find the right fit.
Tags: guide, process to sell a structured settlement, structured settlement, structured settlements
I am lawyer who has represented a few different clients and was able to get them a lump sum for their monthly stream of money. This process isn’t a difficult one but make sure you do your due diligence. I found some companies like Imperial funding and Peachtree to be somewhat deceiving. I have done deals with JG Wentworth, RSL Funding and Woodbridge. They were the most competitive and the service especially of RSL was great.