Your Rights to Selling Structured Settlement Payments
Finding the cash you need, when you need it, can often be a struggle
. For many who do not have liquid investments, such as stocks and bonds, other options may exist to get you the cash you need now. One such option is to sell structured settlement annuity payments if you happen to be collecting such payments. Those who are collecting such payments do not know that they have the right to sell their rights to those future structured settlement payments and receive a lump sum of cash now. However, a few things should be considered in making a decision.You may be asking, what is a structured settlement? A structured settlement is an annuity contract that provides periodic payments to a personal injury victim as a result of a lawsuit. Typically, a liability insurance company, on behalf of the defendant in the lawsuit, purchases an insurance annuity from a highly regarded and highly rated life insurance company to provide periodic structured settlement payments to the claimant or annuitant.
Selling Structured Settlement Payments - Legal Issues
In 2002, U.S. Congress enacted IRC 5891, requiring that all structured settlement factoring transactions be approved by a state court. These transactions are governed by state statutes. Today all transfers are completed through a court order process. Most state statutes contain similar provisions including pre-contract provisions between the buyer and seller of the payment rights, notice to certain interested parties including the insurance company and lien holders, the recommendation to seek independent professional advice, and court approval that the transaction is in the best interest of the seller and dependents of the seller.
The process of cashing out a structured settlement is known as a structured settlement factoring transaction. Reasons for selling structured settlement payment rights vary but can include medical expenses for oneself or a loved one, the need for improved living conditions or transportation, college expenses, or the pay off high interest debt, such as credit cards. The annuitant has a choice of whether they would like to sell all or part of their structured settlement payment stream; this includes splitting the number of payments being sold or the amount of each payment being sold.
Structured Settlement Factoring
Structured settlement factoring transactions are priced using a discount rate to calculate the present value of the payment stream. A discount rate is similar to an interest rate of a credit card but reversed in the sense that the time value of money is calculated into the transaction to acquire the present value. Discount rates can range from 8-18%+ depending upon many factors including the payment stream, funding company, and court costs.
It is important for annuitants to shop their structured settlement payments to multiple companies in order to receive the best price for their future payments. A common practice in the structured settlement factoring industry is for companies to initially low-ball an offer, and then adjust the quote higher if the annuitant has received a better offer from another company. Other worse practices in the industry include "interest drag" which is the practice of prolonging the court process in order to increase profit through the per diem rate. It is also a good idea to check the Better Business Bureau record of the company you are doing business with to check the company's complaint history. This will ensure that you are working with a reputable company.
If you are looking to sell structured settlement payments and receive the MOST MONEY, please contact us directly toll free at 1-800-350-4523 or you may also complete the Free Quick Quote Form on our website and receive a Free No-Obligation Quote.
Your Rights to Selling Structured Settlement Payments
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