Sell My Structured Settlement
Have you been thinking, “How can I sell my structured settlement?” Worry no more! You can exchange your structured settlement for cash seamlessly when you know how to go about it. Indeed, you need to consider some things to ensure that you do not regret the decision later. You will learn all you need to know about factors to consider before selling your structured settlement in this article. Also, you will understand the legalities and other essential things in this step-by-step guide. You will no longer be a novice but will know what to do with your structured settlement. Please keep reading for Sell My Structured Settlement.
Sell My Structured Settlement: Structured Settlements and Annuities
The process for selling structured settlement payment and annuity is straightforward. Nevertheless, you need to be sure that you are in desperate need of money before deciding to trade. If you are sure that you want to sell your structured settlement, let us proceed. It is crucial that you prepare, get information, and in control all through the process. Note that the process of selling commercial annuities and structured settlement payments is the same. Nonetheless, there are critical differences between the two.
To comprehend the differences between the selling processes, you need to know that structured settlements differ from annuities. Annuities are insurance products you can buy from an insurance company or agent. You can purchase them as part of a long-term retirement plan to ensure income in your retirement years. Meanwhile, structured settlements are periodic payments negotiated between the defendant and the plaintiff in personal injury and wrongful death cases. They are the agreement of compensations for the plaintiff’s loss. Structured settlements are often within the jurisdiction of a licensed structured settlement broker. The broker uses an annuity or other suitable funding asset to finance the payments.
Structured settlements’ legal status makes selling them a bit less straightforward than selling commercial annuities. If you want to cash out of your commercial annuity, you can sell your payments to a third-party company. Otherwise, you can surrender your contract to the organization. However, if you need money from your structured settlement, you only have an option. The option is to find a buying company, also known as a factoring company. These companies buy all or a part of people’s future payments in exchange for a lump of cash.
Sell My Structured Settlement: Secondary Annuity Markets
The popularity of structured settlement has been on the rise over the years. It is one of the most equitable and efficient means to compensate victims of personal injury for their pain. It offers a stable stream of income, unlike a one-time, lump-sum payment. Congress passed the Federal Periodic Payment Settlement Act in 1982 to encourage its use. This act exempts structured settlement revenue from all income taxes. Interestingly, even when a structured settlement annuity earns interest, it is still free from taxation.
A secondary annuity market sprang up to serve those who need cash in exchange for their long-term payments. Structured settlement buyers began their operations in an environment devoid of regulations. Therefore, some of them exploited eager and uninformed sellers. Sometimes, these organizations would buy entire income streams at a steep discount due to the seller’s naivety. Their actions left many sellers financially vulnerable when they ran out of cash from the lump sale. However, things are different now.
State legislatures, in collaboration with trade organizations, have changed the situation. The trade organizations are the National Association of Settlement Purchasers and the National Structured Settlement Trade Association. These organizations have laws that regulate the purchase and sale of structured settlements. These laws protect payees and offer consistent standards for the transfer of structured settlement payments in the secondary market. Today, dishonest organizations have no place in the industry, thanks to federal and state laws.
Sell My Structured Settlement: Steps
Due to state and federal regulations, the structured settlements industry is now a low-risk sector. So, you should have less fear of exploitation by unscrupulous companies. Follow the steps below to make things easier:
Step 1: Do Your Homework on Buyers
The first step in selling your structured settlements is to research buyers. With a simple internet search, you can get a lot of information about purchasing companies. Remember that many buying organizations are out there. So, ensure that you find a buyer that can offer you the most excellent service and deal. Take your time, depending on the urgency of the need. You can draft a list of the companies and compare their services and offers. They need your structured settlement as much as you need the cash. Hence, do not rush into any deal until you are sure that it is the best one.
More so, find a company with positive online reviews. Besides, ensure that the company you choose has a high rating from the Better Business Bureau. It is also ideal to seek the counsel of an accountant or financial planner. Try as much as possible to find a reputable buying company that will be patient enough to answer your questions.
Step 2: Contact an Agent and Obtain a Free Quote
After finding a topnotch structured settlement buyer, you should start making phone calls. Speak with a customer service representative who will give you details about your selling options. Ensure that you do not let the person sway you with technical terms. Do not hesitate to ask questions whenever you need clarity. Call multiple companies and ask them for a free quote. Besides, it is not wrong to make your potential buyers aware that you are getting quotes from numerous companies.
It is highly plausible that you get a better quote when a buyer knows that you want the best offer. Do not take the words of the representatives for it. Some will try to convince you that their offer is the best out there. Do your research to verify whatever information you get from them. Do not let anyone put you under pressure. Ensure that you are in control throughout the process. Take your time until you find the best offer for you and your family.
Step 3: Review and Accept an Offer
Evaluate different offers and compare them. Accept the one that you are confident is the best for your needs. Note that you will be selling your structured settlement at a discount rate. So, you must accept the offer with the lowest discount rate. The lower the discount, the more you will benefit from the payment of your right. However, the buying company earns more when you sell your structured settlement at a higher discount rate. Do not rush into a deal. You can negotiate the discount rate with a potential buyer.
Usually, most buyers often have a fixed rate for their dealings. Nonetheless, there is no harm in trying to get the best deal by negotiating. According to the National Association of Settlement Purchasers, the average discount rate ranges between 9 and 18 percent. If you want to cash out a commercial annuity, it is better to sell some payments to a factoring company. Selling some payments to a factoring company on the secondary market is better than withdrawing the money. Withdrawals can cost you surrender charges and tax penalties, depending on the length of time and your age.
Step 4: Finalize Paperwork
Your insurance company and the factoring company will process the paperwork to sell a commercial annuity. After completion of the documentation for the transfer of ownership and payee designation to the buyer, you are almost done. The remaining part of the process takes roughly four weeks. When selling structured settlements, you will have to provide information to complete various forms. Moreover, you will have to send a copy of your original structured settlement contract to the buyer. If you cannot find the document, contact the insurance company that issues your check for a copy of your policy. Otherwise, contact the lawyer who was in charge of the settlement in the first place.
The documents you will need before you can put up your structured settlement for sale include:
- Release agreement
- Completed application
- Two forms of identification
- Copy of the original structured settlement contract
After accepting your cash offer, the buyer will send you the transfer documents you need to sign. You should not waste time with these documents because you will not receive payment until you return them. Moreover, ensure that you have the habit of keeping records of all transactions somewhere safe and accessible for future use.
Step 5: Obtain Approval and Get Your Money
You cannot sell a commercial annuity without the approval of the insurance company that issued the contract. There is no cause for alarm regarding getting the support of the company. Once the buyer is credible and the sale is legitimate, the insurer will approve your transaction. Therefore, you will receive your payment. However, your state law will determine how fast you can receive the lump-sum payment for your structured settlement.
Usually, it takes between 45 and 90 days to initiate and complete the process of selling structured settlement payments. In some states, you will need to receive a professional assessment of the sale by a third party. Also, some states give you some time within which you can change your mind. You can cancel the offer if you no longer want to sell your right. You should check with your financial advisor or lawyer regarding structured settlement laws in your state. Checking will enable you to be conversant with the process.
Sell My Structured Settlement: Court Approval
Court approval is more of an extra step when selling your structured settlement payments. The government is aware that you may be making a wrong decision by selling your structured settlement. A judge will review your sale and speak with you to ensure that it is in your best interest. When selling payments from an annuity bought via an insurance company. After signing and returning the documents, a local attorney will file the paperwork with the court to schedule a hearing.
More so, you can hire an attorney for this purpose or go with the one the factoring company appoints. It may take up to 60 days after filing all signed documents before you get a court date. Nonetheless, it depends on your location and what is on the court docket in your place. What determines how long you will receive your money from the sale of your structured settlement is your court appearance. If the need is urgent, you may be eligible to receive cash in advance from the buyer. You can get the payment within a few days.
Structured settlement payments regulations vary from state to state. So, it is better to consult an attorney in your state or seek professional counsel before completing the deal. When you appear in court, be ready to explain to the judge why you need the money. Also, you have to show that you are not putting your family’s finance in jeopardy for instant gratification. The judge will evaluate your case by considering the company’s reputation, reasons, employment status, and the discount rate. The issuing company will receive the transfer order for acknowledgment once the court approves the sale. Then, the factoring company will send you a lump-sum payment.
It is the lack of knowledge that brings about complications to any process. As you can see, selling your structured settlement is not rocket science. It is a safe and straightforward process when you follow the guidelines. With the government’s regulations, factoring companies are under pressure to act within the confines of the law. Therefore, you can be confident of getting a good deal.
Nevertheless, you need to do your research to ensure that you position yourself for the best offer. Make sure that you are not selling your structured settlement out of a lack of self-control. Do not decide you will regret for the rest of your life.
National Association of “Settlement Providers” | What Settlement Purchasers’ Makeover Reveals, and It is Not All Good. (2019, January 19). Retrieved May 31, 2020, from https://structuredsettlements.typepad.com/structured_settlements_4r/2019/01/national-association-of-settlement-providers-what-settlement-purchasers-makeover-reveals-and-its-not.html