For several decades, structured settlements have been a widely accepted and established feature of the American legal landscape. They are intended to assist persons who obtain settlements in managing their money to improve their long-term financial well-being. Structured settlements can occur from various litigations, but the most typical are personal injury lawsuits.
What is a Structured Settlement?
Structured settlements are a set of tax-free payments made regularly to legally ‘right a wrong.’ As with any other legally mandated or awarded compensation for wrongful death, medical malpractice, or injury, structured settlement payments are tax-free.
While structured settlements provide long-term financial protection, there are circumstances when a significant sum of money is urgently required. Selling your future structured settlement payments is a great option to receive a substantial sum of cash for these emergencies, including medical emergencies, family emergencies, or unexpected travel.
What Is the Value of My Structured Settlement?
Even though your structured settlement is worth the current value of your contract, it does not necessarily mean that you will receive the exact amount when you sell your payments. The present value is the current cash value of all future payments due minus a percentage set by the factoring company.
Can you legally transfer your structure’s settlement payments?
You can cash out your structured settlement by selling it to a certified factoring company. Although you must first receive court approval, you have the legal right to sell your payments to a structured settlement buyer in part or whole.
How to Sell a Structured Settlement
Understanding your rights in the process and knowing how to receive the best value for your valuable asset are the keys to selling your structured settlement. However, selling structured settlement payments is a big decision that should be carefully considered. The following guide will help you get better insights into selling structured settlements and help you get the most out of it.
Determine your needs: First and foremost, you must decide whether or not selling your future structured settlement payments is the best option available. Keep in mind that selling future structured settlement payments is an irrevocable process. Secondly, determine how much cash you require and how much your structured settlement you wish to trade.
Get Quotes: Engage a structured settlement factoring company for a quote for your future structured settlement payments. You’re probably wondering what a factoring company is? Well, it is the company that buys all or part of your future structured settlement payments in exchange for a substantial sum of money. It’s a good idea to get multiple quotes from different factoring firms (We recommend JG Wentworth, DRB Capital and Settle4Cash) to ensure that you get the best deal. Ensure that each offer spells out all the fees the factoring companies will require you to pay.
Weigh your options: Once you have several offers on the table, carefully compare them to each other. You can engage the help of a qualified financial advisor to help you determine the best offer. But before you sign any document, make sure that all of your inquiries have been answered and that you feel at ease working with the company you’ve chosen. Once you are confident with your choice, proceed by signing the required paperwork to officiate the transaction.
Get court approval: Your factoring company makes all of the necessary preparations and documentation for you to appear before a judge in your county. You have to answer a few questions to convince the judge that this deal is in your best interests. If the court approves the transaction, you are required to send out a copy of the order to the administrator of your structured settlement.
Receive your money: As per your agreement with the factoring provider, you will be paid in full. This usually happens within three to five business days following the court’s approval.