If you have received a structured settlement, you may be considering selling it off to a structured settlement buyer. That is perfectly understandable; based on the proliferation of secondary buyers that have sprung upon the market over the past decade or so, you are most certainly not alone in this sentiment. After all, working with a structured settlement buyer to receive cash for your settlement could provide you with money to do the following:
- Pay off mounting medical bills that resulted from an emergency
- Pay off overwhelming credit card debt
- Pay off student loans
- Provide a down payment for a home
Obviously, there are a few excellent reasons as to why you would be on the lookout for a structured settlement buyer. However, before you do, there are a few things that you should be aware of concerning the process.
Not All There
The biggest thing you should be aware of if you work with a structured settlement buyer is that you will not retain the full amount of your structured settlement. Typically, you will only receive anywhere between 60% and 85% of your original structured settlement amount. This may come as a surprise to those who are expecting to receive the full amount of their structured settlement in one lump sum.
A Long, Complex Process
Another thing that you should be aware of is that the process of getting your structured settlement once a buyer has been determined is not exactly a cut and dried process. All but six states have what is known as a Structured Settlement Protection Act on record. This bit of legislation dictates that no transaction between a person and a structured settlement buyer can be officially completed without the approval of a state court.
The reason for this rule is simple: It is put in play so that any money that is used in cash for structured settlement situations is done so in a manner that is not deemed by the courts to be frivolous in nature. In other words, it prevents people from taking the money and doing things like going on a dream vacation. This is due in part to the fact that the concept of a structured settlement is tied to legal cases, and should not be used in a manner that could compromise the integrity of the settlement.
Also, if your transaction with a structured settlement buyer is approved, you should be prepared to wait a while for your money to reach you. The money from cash for structured settlement situations will not reach your hands until at least thirty days, if not longer. As such, you should make appropriate financial plans in order to compensate for this time lag.
It’s up to You
In essence, it is important that you do the research on the ins and outs of working with a structured settlement buyer. This process is no different than any other financial-related situation. It really is a simple rule of thumb to use: If a process involves your money, you should research it as thoroughly as you possibly can. You will be thankful that you did in the long run.
Recoveries that are not taxable that come as periodic payments on specific due dates are known as structured settlements. For workers’ compensation claims as defined under IRC Section 104(a)(1)...
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Designed specifically to meet the needs of an injured party, a structured settlement annuity provides periodic payments over a set amount of time that are free of taxation. The...