My Fleep:
Finance
Finance
How To Sell Your Structured Settlement Payments
If you currently receive payments from a structured
settlement, you might be wondering if you can exchange your
monthly payments for a lump sum of cash. Although
structured settlements were created to protect plaintiffs
and injured parties from financial hardship, circumstances
often change, and the periodic payments that seemed
adequate at the time of the settlement may no longer be
enough money to make ends meet. Many US states now allow
beneficiaries of structured settlements to sell either a
portion or all of their future payments. Before you go
rushing off to sell your payments to the first bidder, you
should take some time to familiarize yourself with the sale
process and compare several different structured settlement
buyers.
While it may be tempting to save money and sell your
structured settlement on your own, considering the
importance of the decision and the long term effects it
will have on your finances, you would be wise to consult an
attorney who is well-versed in the laws governing the sale
of structured settlement annuity payments. In many states,
the law requires a person wishing to sell a structured
settlement to have legal representation.
An attorney will provide you objective advice about selling
your settlement and protect you from any unanticipated
situations that may arise. One common obstacle to
completing the transaction is the insurance company that
underwrote the annuity. Insurance companies are concerned
that the sale of structured settlements will expose them to
additional tax liability. Your attorney will work on your
behalf to obtain the cooperation of the insurance company.
In 2002, federal law concerning the sale of structured
settlements was changed. As a result, sellers must now
obtain court approval before the transaction is initiated.
The function of the court is not only to protect the seller
from unscrupulous buyers, but also to shield the insurance
company from undesired tax liability. The court will
consider the needs of the seller both short and long term,
and decide if selling the future annuity payments is in the
seller's best interests. An attorney will prepare the
necessary documentation that must be filed and work to gain
court approval. If you decide not to retain legal counsel,
most structured settlement buyers will be eager to help you
to gain court approval and expedite the sale.
When selling a structured settlement, your lump sum will be
quite a bit less than the future value of the annuity,
because the cash amount is based on the present day value,
not the interest that the annuity would have earned in the
future. The structured settlement buyer will also charge a
fee for their services. In the end you will probably
receive less than 50 percent of the amount of the future
payments. You should definitely compare quotes from
several buyers of structured settlements to insure that you
get the largest possible lump sum.
If you have elected to sell your structured settlement
payments, you probably have some financial need which calls
for money quickly; unfortunately, factoring in the time
required to gain court approval, it could take up to 90
days, assuming you don't run into any roadblocks from the
insurance company. Be wary of any structured settlement
buyer that promises you cash in less than 60 days. Their
questionable claims of fast money should be regarded with
suspicion, and should cause you to look elsewhere for a
more reputable buyer.
----------------------------------------------------
Gregg Pennington writes articles on a variety of topics
including loans, debt and credit, and structured
settlements. For more about structured settlements visit:
http://www.onlinemoneysources.net/structured-settlements.html
If you currently receive payments from a structured
settlement, you might be wondering if you can exchange your
monthly payments for a lump sum of cash. Although
structured settlements were created to protect plaintiffs
and injured parties from financial hardship, circumstances
often change, and the periodic payments that seemed
adequate at the time of the settlement may no longer be
enough money to make ends meet. Many US states now allow
beneficiaries of structured settlements to sell either a
portion or all of their future payments. Before you go
rushing off to sell your payments to the first bidder, you
should take some time to familiarize yourself with the sale
process and compare several different structured settlement
buyers.
While it may be tempting to save money and sell your
structured settlement on your own, considering the
importance of the decision and the long term effects it
will have on your finances, you would be wise to consult an
attorney who is well-versed in the laws governing the sale
of structured settlement annuity payments. In many states,
the law requires a person wishing to sell a structured
settlement to have legal representation.
An attorney will provide you objective advice about selling
your settlement and protect you from any unanticipated
situations that may arise. One common obstacle to
completing the transaction is the insurance company that
underwrote the annuity. Insurance companies are concerned
that the sale of structured settlements will expose them to
additional tax liability. Your attorney will work on your
behalf to obtain the cooperation of the insurance company.
In 2002, federal law concerning the sale of structured
settlements was changed. As a result, sellers must now
obtain court approval before the transaction is initiated.
The function of the court is not only to protect the seller
from unscrupulous buyers, but also to shield the insurance
company from undesired tax liability. The court will
consider the needs of the seller both short and long term,
and decide if selling the future annuity payments is in the
seller's best interests. An attorney will prepare the
necessary documentation that must be filed and work to gain
court approval. If you decide not to retain legal counsel,
most structured settlement buyers will be eager to help you
to gain court approval and expedite the sale.
When selling a structured settlement, your lump sum will be
quite a bit less than the future value of the annuity,
because the cash amount is based on the present day value,
not the interest that the annuity would have earned in the
future. The structured settlement buyer will also charge a
fee for their services. In the end you will probably
receive less than 50 percent of the amount of the future
payments. You should definitely compare quotes from
several buyers of structured settlements to insure that you
get the largest possible lump sum.
If you have elected to sell your structured settlement
payments, you probably have some financial need which calls
for money quickly; unfortunately, factoring in the time
required to gain court approval, it could take up to 90
days, assuming you don't run into any roadblocks from the
insurance company. Be wary of any structured settlement
buyer that promises you cash in less than 60 days. Their
questionable claims of fast money should be regarded with
suspicion, and should cause you to look elsewhere for a
more reputable buyer.
----------------------------------------------------
Gregg Pennington writes articles on a variety of topics
including loans, debt and credit, and structured
settlements. For more about structured settlements visit:
http://www.onlinemoneysources.net/structured-settlements.html