Structured Settlements Authority

How to Get Cash for a Structured Settlement

Selling Future Payments is Costly and Hard Work

Sure, it is exciting to fanaticize about receiving a large sum of cash for selling your structured settlement payments but few people who have not done this before realize effort and costs involved.

Financial institutions known as Settlement Companies or Factoring Companies are in the business of buying the rights to receive future annuity payments under structured agreements. Make no mistake; they are in this business to make a profit so you need to know what you are doing and also to make sure you get the right legal and financial advice.

When you receive an offer that you consider to be sound, have your attorney review it and to explain the legal requirements to you.

The process of selling requires quite a bit of paperwork and will take several months to complete. If you are promised faster results, be on your guard and carefully review what is being offered. The settlement company is not in control of all of the steps in the process so they cannot realistically promise a schedule or date.

IRS Tax requirements and federal laws will require that you go to a state court and have the sale of your structured payments approved by a judge and court order before you will be able to sell. The judge will have to verify that the sale is in your best interest before he will approve the transfer. Federal laws will impose stiff tax penalties on any sale of transfer that occurs without a court order.

Even if your sale is approved, you will only receive a discounted portion of the value of your future payment rights. Getting cash for your structure settlement now can be very expensive. The amount you are offered is affected by many variables. The risk or rating of the insurance company making the offer, the timing and amount of your future payment rights will all affect the amount you receive.

Finally, many people do not realize that they do not have to sell all their annuity payments at one time. The purchase can be structured in multiple ways. For example, you can sell a specific number or percentage of your structured payments all remaining payments or you can simply sell them all. The choice is yours to make.

Legal Aspects of Getting Cash for a Structured Settlement