Structured Settlements Authority

How to Get Cash for a Structured Settlement

Reasons NOT to Sell Your Structured Settlement

There are many companies who will encourage you to sell structured settlements for cash lump sum payments. These companies offer their clients liquidity and immediate access to a discounted portion of their money. There is nothing wrong with this and these factoring companies operate under the authority of federal and state regulations, which were put into place to protect the sellers. It is understandable that there are times when it might make good sense for an individual to sell their annuity but it is not automatically the best decision and there are times when it is probably not the right decision.

The following are examples of times when it is probably not a good idea to sell.

When you do not have an urgent need for the money or a good opportunity to invest it. You would not want to sell your annuity at a discount if you had no reason to do so or could not invest it a higher rate of return.

When the beneficiary of the structured payments is a minor or a person mentally unfit to make the decision to sell. An example would be a person who had been incapacitated or suffered a brain injury as a result of the accident.

If the settlement payments are your only source of income, it would be very risky to sell your rights to receive future payments and then take on the added responsibility of managing a large cash sum.

If your structured agreement consists mainly of future lump sum payments that are more than five or ten years away, it would be very costly to sell since the amount you would receive for them would be very small due to the time value of money.

If you have significant debts or back taxes, when you sell your payments part of the sum may be garnished or taken from you to settle those claims. When you are receiving a stream of payments for living and medical expenses the potential for this happening is much smaller.

These are a few of the more common reasons why you would not want to sell your structured settlement payments but there can be many more. Because of this, it is wise to seek sound financial and legal council before making important decisions like this. Be cautious and be on guard for high pressure tactics by companies to get you to sell. You should never be made to feel uncomfortable or pressured to sell or do anything other than what is in your own best interests. Fortunately there are legal safeguards that have been put into place to protect the seller and any sale will have to first be approved by a judge before it can take place or else it will be subject to a penalty tax.

Legal Aspects of Getting Cash for a Structured Settlement