There are life issues that may threaten an individual’s financial stability, such may include divorce, paying off debts, funding college education, and so on. Thus, selling their structured settlements might be the only viable option available.
As a result, one must have full knowledge of the details of their structured settlements before considering selling them.
Hence, this copy details what Structured settlements are, the reasons for receiving settlements, and what selling those settlements means. The copy also explains the benefits of selling structured settlements and the processes involved.
What are structured Settlements?
Structured Settlements are simply money paid by an individual or an organization over time as compensation to another person or company to make up for a wrong. The offenders, that is those responsible for the wrong may pay the settlements on their own or be forced to make the payment when they fail to win the case in the court.
In a case whereby the amount of money to be paid is considerably small, the settlement recipient may receive a whole sum. But, if the money to be paid is large, then the payment comes in form of a structured settlement.
As a result, the offenders will employ the use of an Annuity. An annuity is a financial product that ensures that regular payments are made from an insurance company over time.
The pact features the number of payments to be received by the recipients over a specific period as compensation for the wrongs committed against them.
Furthermore, distributing the compensations over a longer period offers the future assurance of financial security because a lump sum at once may be expended quickly.
What Is Selling structured settlements?
If an individual or a group of people such as relatives or family members are recipients of structured settlements. Thus, the payment is expected to continue for some time or even a lifetime.
However, if peradventure some financial crisis or situations arises that warrant a huge amount of money, the receiving party(ies) may consider selling part or whole of their structured settlements.
What Are the Benefits of Selling Your Structured Settlements?
There are several advantages of selling your structured settlements, some of them include:
- Urgent Need
- Instant payment
- High interest Debt pay-off
- Make A Desired Purchase
- Fund A College Education Or Offset A Study Loan
- Sponsor Divorce
#1. Urgent Need
If there is an urgent need for a huge amount of money, selling your privileges of receiving a settlement might be the only choice available.
However, you might be losing a part or proportion of a realizable profit, but it may also be the only viable alternative to meeting your urgent needs and demands.
#2. Instant Payment
Another reason for selling settlements is that you get to receive a whole sum within a very short period such as a month or two. Contrary to having to wait for a year to receive your settlements in parts.
Also, an opportunity may arise which may require a quick response, hence selling your structured settlements comes in handy at such a time.
#3. High Interest Debt Pay-off
Another very important benefit of selling your structured settlements is debt. If you have pending debts to pay especially with a high-interest rate, selling your settlements might be the best choice to make to offset the debts.
Also, paying off the debts now will allow you some more money that could have passed as the interest on the debt.
#4. Make A Desired Purchase
At a certain stage of life, there is a need for individuals to make certain life major purchases. These purchases might be necessary and important but above our pay grade or salary. Hence, there is a need to source for funds to be able to afford these amenities, which include:
- Owning or Buying A House: Purchasing a house is one great step in anyone’s life, it symbolizes a transition into adulthood. Whether such an individual is single or married, moving from a rented apartment into a personal home is a huge step to take. However, one of the greatest problems faced when buying a house is down payments. It is a percentage of the total cost of the house and it depends on the loan obtained. Besides, down payments are usually between 5% – 10%. Therefore, selling a part of the whole of your structured settlements will help you have enough cash at hand.
- Owning or Buying A Car: Getting a Car also comes with its peculiarities. There are upfront payments to be made and this depends on how expensive the car you’re purchasing is. Even if you decide to go for second-hand cars or a lease, there are also maintenance fees which may sum up to be very high due to inflation and price hikes. Hence, selling your structured settlements may help take care of some of these bills and expenses.
- Buying or Starting A Business: Capital is required to start any business. This may be difficult to come by considering the rate of inflation and other technicalities. Hence, selling your settlements is one sure way of raising a huge amount of money to get your business off the ground.
#5. Fund A College Education Or Offset A Study Loan
Due to the high cost of higher education, a lot of students are being forced into considering taking a study loans.
Also, coupled with the rise in educational expenses, millions of people are neck-deep in debt just for the sake of getting a quality education.
However, some students who are recipients of structures settlements may discover that their payment isn’t sufficient to fund their tuition mostly due to a hike in tuition fees.
Hence, such students may have to consider selling part of their settlements to help make up for the price gap to avoid debts.
Furthermore, workers who have previously been victims of an accident at a workplace and have received structured settlements may decide to further their education by selling art or all of their settlements.
This will also help them to have a variety of job options to choose from. Especially if their injury prohibits them from working at their former place of work.
#6. Sponsor Divorce
There are certain painful situations such as Divorce that may threaten people’s financial stability. Because it deals a heavy blow to both parties involved both emotionally and financially.
Also, both parties may have to experience a rough patch due to the break coupled with other added financial expenses and obligations. such expenses may include Legal expenses, therapy sessions, and child counseling fees.
Hence, most individuals are forced into selling part or all of their structured settlements as it is mostly a jointly owned asset. Besides, a party may be forced to sell their share of the asset to avoid bankruptcy or going broke.
What Are The Reasons For Receiving Structured Settlements?
There are several reasons which call for the need for structured settlements. Below are some of the reasons for Structured Settlements.
- Workers Compensation
- Wrongful Death
- Personal Injury
- Medical Malpractice
#1. Workers Compensation
Workers’ compensations are payments given to workers of an organization who gets injured while working in the organization or while on duty.
The payments made can be used as salary subs or to reimburse for medical expenses during the periods of absentees.
#2. Wrongful Death
Structured settlements are also means by which an organization or an individual compensates the family members of another person who died as a result of wrongful death.
Also, the family may get several fixed tax-free compensations over a period to cover the deceased income.
#3. Personal Injury
Personal injury occurs when an individual who has sustained a wound or an injury files a case against the person believed to be responsible.
Structured settlements may also be offered to pay for medical bills and other miscellaneous.
#4. Medical Malpractice
This is a case whereby an individual or the family of individual files a case against a doctor or a hospital regarding more damage or death caused to their relative.
What Are The Processes Involved In Selling Settlements?
The following are the processes involved in selling structured settlements.
- Calculate Your Needs
- Get Quotes
- Compare Offers
- Cash advance
- Receive Court Approval
- Access Your Funds
#1. Calculate Your Needs
It is advisable that before you consider selling your settlements, you should evaluate your needs and how much exactly would suffice. This will help you decide whether you should sell all your payments or sell a part of it.
Also, you should have it in thought that the amount of money that would be given at the instant of selling would be relatively smaller than that total payments to be received over time.
Hence, evaluating your needs would help you ascertain the exact amount of money you’d be needing so you won’t have to go through the process over again in case of insufficiency.
Furthermore, evaluating your needs would help you decide whether to sell in part which could be an added advantage of your payment continuation.
#2. Get Quotes
This stage is when you reach out to a factoring company which is the company that will be buying the settlements.
This is to decide how much the company is willing to pay and other necessities. Thus, it is reasonable to request quotes from more than just one factoring company, as this will help you choose the one that best suit you or your needs.
Some of the best Factoring companies are:
#3. Compare Offers
This is the part where you get to compare the various quotes from the different factoring companies you’ve contacted. Also, you should ensure you check through all paperwork and terms of agreements.
Additionally, make sure you leave no information out, if you’re in doubt, seek peoples help preferably get a lawyer to read and evaluate the terms and agreements for you. This would give you confidence in the deal you are about to make.
The required paperwork includes:
- Two forms of identification
- A completed application
- Copy of the original structured settlement and release agreement
- A Copy of your annuity policy
#4. Cash advance
This options allow you access to a part of the funds, just in case you need some money immediately. Thus, you can request for an advance before the whole process would be completed as it takes about 2 to 3 months for the whole deal to be approved.
#5. Receive Court Approval
This is a very important part of the whole transaction as this validates the deal and ensures authenticity.
However, the factoring company does the paperwork and the whole arrangement to appear before a judge. While you just have to appear in court and answer the judge’s questions to ascertain the transaction is in your best interest.
Moreover, the judge will consider the interest of your dependants before approving. Similarly, after approval, you have to forward a copy of the order to your settlements administrator.
#6. Access Your Funds
This is the part where you get your full money and it takes about 3 to 5 working days after court approval.
However, if you owe any state debt, unpaid due to child support or tax, they will be removed from the sum before you receive it.
Conclusion
There are several processes involved in selling structured settlements, these processes take a certain period to be completed.
Thus, you have learned the steps involved in selling your structure settlements. We have also learned about some of the benefits of selling those settlements.
Furthermore, we have seen several top factoring companies that offer brilliant quotes for selling structure settlements.
FAQs On Selling Structured Settlements
What are structured Settlements?
Structured Settlements are simply money paid by an individual or an organisation as compensation to another person or company to make up for a wrong.
What Is Selling structured settlements?
If an individual or a group of people such as relatives or family members are recipient of structured settlements, the receiving party(ies) may consider selling part or whole of their structured settlements in case of financial difficulty or crisis.
What Are the Benefits of Selling Your Structured Settlements?
- Urgent Need
- Instant payment
- High interest Debt instant pay-off
- Make A Desired Purchase
- Fund A College Education Or Offset A Study Loan
- Sponsor Divorce
What Are The Processes Involved In Selling Settlements?
- Calculate Your Needs
- Get Quotes
- Compare Offers
- Cash advance
- Receive Court Approval
- Access Your Funds
References
- Annuity.org – Selling Structured settlements
- Crowfly.com – benefits of selling structured settlement payment
- Structuredsettlements.com – selling payments (how to sell)
- Superiornotaryservices.com – Reasons to sell structured settlement
- Settle4cash.com – structured settlements
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