A structured settlement is a negotiable financial product. If you hold one, you can sell it to a factoring company to get the money immediately. A court order is required to legally sell your structured settlement payments to a buyer, but you do have the right to do so. If you have a structured settlement with certain conditions, you will be allowed to sell your survivor benefits as well.
If you can demonstrate that selling your structured settlement won’t hurt you financially, the court will approve your decision to sell your payments. Selling a structured settlement should not be considered a bad financial decision. Many people sell their structured settlements to invest money into a better option. However, a lump amount of cash may help you accomplish financial objectives that would otherwise be out of your grasp; obtaining a large sum of cash may also cause unnecessary expenditure and waste of money.
Here are the main points to consider while attempting to sell a structured settlement:
- Enlisting the assistance of a reputable attorney or financial adviser with expertise in the structured settlement secondary market will be very beneficial if you plan on selling your structured settlement payments. Factoring companies having a history of looking out for the long-term interests of their customers will aid your search.
- Whether or not you can sell your money will be determined by the conditions of your settlement and the regulations in your state. These Structured Settlement Protection Acts (SSPA) rules are put in place to safeguard beneficiaries of structured settlements against unscrupulous purchasers of their settlements.
- Every structured settlement transaction requires the permission of a court. When it comes to determining the price for your structured settlement payments, the court will examine all of the aspects — including what you’re selling, what portions of your payments you’re selling, and whether you’re selling all of your structured settlement payments.
The judge may consider the following:
- Your out-of-pocket living costs
- Tuition payments for the following years
Incentives and techniques to increase sales of structured settlements
In order to prevent you from entering into an arrangement that may cause you undue financial hardship, some restrictions have been put in place at both the state and federal levels.
Consider the consequences of selling your structured settlement for a while before deciding to do so. The sale will have the following possible repercussions.
- It could impact your retirement plans, as well as your eligibility for Social Security and other government assistance programs.
- You will incur additional tax liabilities.
How to know the value of your settlements?
Settlements that you secure using structured settlements have the value of the payments on your contract, but you won’t get the present value of the payments until you sell your payments. Because the business will not get the money until some future date, the present value of the payments is calculated by taking the future worth of the payments and subtracting the impact that is missing out on an immediate investment would have on growth potential.
If you want to know how much money you could expect from a structured settlement, you can use a free structured settlement calculator to give you an estimate, but keep in mind that no computer can predict all of the nuances of your contract. Estimate your price and then anticipate bids to differ.
Benefits of Selling the structured settlements
While structured settlements provide financial stability over a long period, individuals sometimes find themselves in circumstances that need the immediate receipt of a significant amount of cash. It is in these situations that the option to sell your structured settlement payments can be a lifeline and not always in a literal sense.
If you find yourself in a situation where you require more money at once then, selling a portion of your settlement can provide you with a lump sum of cash that will not only allow you to meet your financial obligations but will also provide you with peace of mind. The stress of impending debt may result in a variety of mental and physical health issues.
Structured Settlement of a Minor
The structured settlements that are provided for children are the ones that are the most closely guarded. A parent or legal guardian can sell the right to future payments in a personal injury lawsuit if a kid under the age of 18 obtained a structured settlement and his or her circumstances have changed significantly after the settlement was imposed. However, the burden of evidence is high.
Parents or guardians must show convincingly to the court that they have an urgent need for cash and that selling the settlement would be in the child’s best interests rather than continuing to receive monthly payments in the future.