Cash For Structured Settlement

If you are the beneficiary of a structured settlement as the result of a personal injury, medical malpractice, or workers' compensation case, you may have seen ads that promise "cash for your structured settlement", and be wondering if you should cash out. Even if you really need the money, you should carefully examine your options, and try to determine if selling your settlment is truly in your best interest.

Promises of Cash Payment for your Structured Settlement

A growing number of companies offer "fast cash" or "cash payment" for structured settlements. You should try to make sure that the company you choose to work with is on sound financial footing, such that you are not at risk for default on your promised cash payment after you sign over your annuities. You should also make sure that your company is competent and ethical, and won't try to come back at you if they later have problems obtaining your settlement payments after you are cashed out.

Before You Enter Into a Structured Settlement

Not all plaintiffs have the luxury of choosing whether part or all of their settlement will be structured. For example, a number of states require that certain future damages awards be paid in installments as opposed to in a lump sum, or permit a defendant to petition the court to pay future damages in installments. However, where a plaintiff can choose between a structured settlement or lump sum payment, care should be taken to make the correct choice.
Benefits of a structured settlement include possible tax avoidance, preservation of settlement funds for future care and future needs, and coordination of settlement proceeds with other benefits or public assistance.
Disadvantages of a structured settlement include possibly not having the available funds to make necessary purchases, or even desirable discretionary purchases, high commissions on the purchase of annuities, and a low yield as compared to other investment options. Also, if payments are equal, each payment will actually be reduced in real value as compared to the prior payment due to the effect of inflation.

Considerations Before Selling Your Settlement

Factors which should be taken into consideration before selling a structured settlement include:
Legal Restrictions - Due to the nature of some settlements, there may be legal restrictions on their sale.
Contractual Restrictions - Some structured settlements and annuities are set up in a manner which makes it difficult to impossible to sell them.
Tax Considerations - A structured settlement may offer considerable tax savings to an injured plaintiff, whereas a cash payment may subject the plaintiff to a significant, immediate tax liability.
Low Offers - Sometimes a buyer of structured settlements will make an unreasonably low offer for the settlement.

Can a Lawyer or Accountant Help

While a lawyer may not be able to help you decide if you should sell your settlement, a lawyer or financial professional can help you figure out the short- and long-term financial consequences of selling your settlement. They may also be able to help you determine a reasonable selling price for the settlement. A lawyer can also review a proposed contract for the sale of your structured settlement to make sure that you are adequately protected in the event of future complications.
Depending upon your circumstances, you may require a court to approve the sale of your structured settlement, and a lawyer may be able to assist you with that process.

Copyright © 2004-2006 Aaron Larson.

It is not very difficult for a person who has acquired a structured settlement to trade it for cash. Irrespective of the source of the structured settlement, whether from an insurance claim or an out-of-court settlement, a good factoring company can help in obtaining cash for a structured settlement. The factoring companies give a lump sum to an individual and become beneficiaries of the periodic payments. The lump sum is given minus the factoring companies’ fees which can be up to 15% of the total amount. The amount can be used in a number of ways to accomplish objectives such as repaying debts, buying a vehicle or a house, or funding education. It would not be possible if the money was made available in installments. At the same time, one should sell structured settlements only for meeting genuine requirements and not perceived ones.
A person wishing to sell his structured settlement should decide upon the amount that he wishes to sell giving due consideration to the genuineness of his need and his future requirements. Prospective sellers should shop online for the most appropriate factoring companies so that they can get the best price and terms for their structured settlement. It is possible to get free quotes online that give a basis for comparing settlement firms. One should also try and get an idea of the company’s reputation for fair-dealing, technical competence, and prompt payment. A person desirous of selling a structured settlement can also do so by contacting a structured settlement broker who can apprise the seller of the best offers available. The seller should be proactive in keeping himself informed regarding any developments with respect to the sale of his settlement; he should also be aware of the responsibilities of the broker and the buyer as well as the steps that need to be carried out to sell the settlement. At no stage should a seller allow himself to be pressurized into making a deal which he is not comfortable with.
The process of selling a structured settlement can take up to two months. Some states in the United States have a minimum waiting period before a structured settlement sale can go through. The obligations to be fulfilled vary with the state and one should be aware of requirements as per state law. A court will decide whether the sale of a settlement is in your best interests. The court procedure involves submitting relevant documents and when these are approved, a date for the sale of the annuity is given by the court. A court-approved sale of annuities is exempt from taxes.

What if I want all of my money?

There may come a time when people who receive structured settlement payments wish to cash them out and receive a lump sum payment. There are a number of companies available who are willing to buy these settlement(s) and give them a lump sum payment. Before contemplating such a move, it is in your best interest to consult with an attorney or financial adviser.

• Peachtree Settlement Funding is the nation's largest purchaser of structured settlements. Call a toll free number or request more information from their website.
  
• Novation Capital offers help through a toll free phone number or online form. They have a "FAQ" page as well, and can help wade through your state's regulations.
  
• Patriot Settlement Resources are purchasers of structured settlements, lottery payments and other future income streams. Convert your future payments into cash today.
  
• Structured Settlements at StoneStreetCapital. Specializing in personal injury settlements, structured settlements, cash for structured settlements and personal injury settlements.
  
• Torrey Pines Funding can assist you quickly in getting cash for your structured settlement.

There are many reasons people want to convert their structured settlements to a lump sum payment. Usually it's because they need a large amount of cash for a variety of reasons. Taking all or a portion of the settlement in one lump sum can pay for education, down payment on a home, or debt consolidation. And in the event of the death of the recipient, the heirs may want to sell the settlement for the lump sum so it can be divided between them.
Since 1979, Structured Settlements have become the most common way to settle personal injury cases. Payments are non-taxable, and the recipient is assured of a steady source of income. Should the recipient decide that he would like to have all or part of the settlement converted to a lump sum payment, there are many companies who can assist. Approval must be made by the court first, for the protection of the recipient. Lives and circumstances change, and the option to sell or assign the settlement for cash is always available.