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What is the Basic Process Followed to Cash in a Structured Settlement?

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:

  1. 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;
  2. The owner sends the requested copies of the settlement agreement, underlying annuity contracts and other supporting documentation to the buyer. Then;
  3. 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;
  4. 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 dependents. 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.

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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