News and Tips on structured settlement transfers.


Cashing Out Your Structured Settlement – The Essentials

While the ads featuring everyday joes and janes singing about getting cash now seem whimsical and appealing, selling your structured settlement is a serious decision, nor is it as fast and easy as some companies make it out to be.

Selling your structured settlement is, in legal terms, called a structured settlement factoring transaction.  By factoring, it means that you are giving up a future stream of payments for a lump sum today which will be less – possibly significantly less – than the total amount of those payments.

Every state has laws that govern structured settlement factoring transactions.  These laws are meant to protect sellers from unscrupulous buyers.  As a result, there is a controlled process that must be followed for every structured settlement sale. 

Before you choose a buyer for your structured settlement, be sure that you’ve shopped around ( makes this easy by allowing you to post the details of your settlement and get competing bids), and be sure that you’ve checked out the prospective buyer through the Better Business Bureau.  If the buyer you’ve selected has lots of unresolved complaints, you might want to reconsider selling.

Most states require structured settlement sellers to seek out the advice of a lawyer to see if selling your settlement is right for you.  Make sure to choose a lawyer who has seen structured settlement sales before.  Make sure the lawyer is independent, too; don’t use a lawyer who is recommended or “preferred” by your structured settlement buyer, because s/he may not have your best interests at heart.

Depending on the state in which you live, you may also have to seek out a financial advisor for his opinion on the sale.  Even if it isn’t required, you might want to talk to one anyway – s/he can tell you what to expect from the sale of your structured settlement, and may be able to point out other options to get the cash you need, rather than selling your settlement.  As with the lawyer, make sure your financial advisor is independent of the buyer of your settlement.

If you decide to go ahead and cash out your structured settlement, it will have to be court-approved.  You may even have to appear in front of the judge yourself.  The judge will review the details of the sale, as well as the reason you’re cashing out, and will pay particular attention to the discount rate.  If the judge believes the sale is not in your best interest, s/he can deny it.

The final step is the cooling-off period.  This is usually a few days after the sale is approved by a court where you can decided to back out of the deal altogether.  Use this time to consider seriously if selling your structured settlement is truly 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.

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