When a person receives a structured settlement, chances are it is due to something rather unpleasant like an injury whose cause was not the fault of the individual. It is how the whole concept of the structured settlement came into existence. It is not the by-product of an investment strategy or some other long-term strategy designed with retirement in mind.
Because of this notion, when a person is in a situation where they need to receive cash for structured settlement, there are a few stipulations that must be met before such a transaction is approved. Such stipulations may feel like unnecessary hoops to jump through, but they are in existence to protect the best interests of the person seeking to pull the trigger on the transaction.
The Structured Settlement Protection Act
If you are in the market to receive cash for structured settlements, chances are you are going to have to obtain approval from a state court in order to do so. Every state has what is known as a Structured Settlement Protection Act on their books, with the following exceptions:
- New Hampshire
- North Dakota
This law authorizes the courts to scrutinize every cash for structured settlements claim in order to ensure that the monies that are being requested as part of the exchange is not going to be used for what could be deemed as frivolous purchases. For example, if a person looking to receive cash for structured settlements so that he or she may have money to cover the cost of spiraling medical costs that may have stemmed from the incident related to the structured settlement, the state court will more than likely offer its stamp of approval. However, if a person were to attempt to receive cash for structured settlements in order to take that dream vacation to Tahiti, it is likely that the state court may frown upon the transaction.
Such a law is set in place primarily to protect the best interests of the person receiving the structured settlement. After all, the receipt of a structured settlement may come with the temptation to not use the money in a way that is wise or logical. The Structured Settlement Protection Act more or less removes this temptation from the equation, thus essentially forcing people to use the monies for their intended purposes.
Time is of the Essence
As you may guess, the court’s involvement in the proceedings means that the overall cash for structured settlement process is not a quick one. People that do qualify to sell their structured settlement to a secondary buyer will not see their money come to them for at least thirty days after the court approves the transaction. In some cases, the receipt of this cash could take several months before it reaches your bank account. As such, if you are in a financial predicament, you should keep this time lag in mind as you begin to take the steps to receive cash. As is the case with anything financially related, your due diligence is essential to the overall process.Call Us Today
Basic Information on Selling Your Settlement Payments are available throughout our website. We provide tips and advice for all of different types of scenarios that are annuitants ask us...
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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...