Selling all or a portion of your future structured settlement payments may be the best way that you can acquire a lump sum of money for an unexpected expense, such as a sizable medical bill or urgent home renovations. Sometimes people refer to this transaction as a structured settlement loan. But that phrase is really inaccurate as you cannot find any such thing as a structured settlement loan. Current laws prohibit structured pay outs from being used as collateral for loans.
Evaluate Your Needs
Step 1: Decide how much money you need and how a lot of your structured settlement you want to sell. Remember that the overall dollar amount of the payments you would receive over time will be higher than the amount you will get from a company that purchases the rights to the payments. That’s because this company will have administrative and legal costs. The business also exists to make a profit.
The lump sum you receive from the buyer, or factoring company, can be as low as 50 percent of your total future payments, but typically will be between 60 and 80 percent. If you get $1,000 monthly through your structured settlement, you may sell each payment for anywhere from $500 to $800.
With that in mind, consider the amount of money you are willing to sacrifice and for how long. A lot of people don’t sell their entire structured settlement. They instead sell some of these payments. They might decide to sell six months’ worth of payments, leaving them without regular income stream off their structured pay out during that time period.
Or they might want to continue to receive regularly scheduled payments during that half a year, so they may sell half of their payments for per annum.
The percentage and amount of time are under your control. You should carefully evaluate your financial situation and consider what would be right for you. Visit this website to get more insight Sell structured settlement payment
Using the example of $1,000 monthly payments, you might elect to market six months of the payments, or $6,000. In that case, you wouldn’t receive anything from your structured settlement for that half a year. Following that time was up, you would again get started acquiring $1,000 per month. That arrangement could bring a lump sum of between $3,000 to $4,800, depending on the offer.
If you elected to sell half of your repayments for the next year, the dollar amount would be $6,000, but, in this scenario, you would receive payments of $500 a month – rather than $1,000 – for a year. Following the six months, you would resume your monthly $1,000 income.
The legal requirements of selling a structured settlement may delay the buyer’s receipt of the amount of money, which might impact the final offer.
Make sure you sell enough payments for whatever debt you need to repay. If you sell too little, you’ll have to start out the process all over again and appear before a judge a second time to get additional funds. If that occurs, the judge may doubt your ability to take care of finances and may be less willing to approve the second transaction.
Step 2: Contact the company that will make the purchase – known as a factoring company – for a quote. This may let you know how much the company will pay for your payments. It’s often a good idea to get more than one quote from different purchasing companies so you can be confident you’ve chosen the right factoring company.
It’s a good idea to check out the ratings for the firms from the Better Business Bureau.
Make sure each offer includes in writing all the fees and commissions the firms will have to have you to pay. It’s best to go into any transaction with your eyes open. After contacting companies and getting quotes, you’ll have a much better idea of how much money you can get for your payments. Armed with this knowledge, you may want to revisit step one.
Assess Your Options
Step 3: Compare the offers to each other. Read all the fine print and know the terms of any deal before agreeing to it. Make certain your questions are answered and you will be comfortable dealing with the company you choose. If you’re unsure, ask someone you trust to help you weigh your alternatives. Don’t be shy about asking more questions.
Investigate the factoring companies until you’re satisfied that they’re reputable. Review their websites, speak to their representatives and check at the professional organizations to which they belong. Once you’ve done your homework, decide which works best for you.
Select the Company
Step 4: Choose the best offer and complete and sign the paperwork.
The required paperwork includes:
Two types of identification
A completed application
Copy of the original structured settlement and release agreement
Copy of your annuity policy
Once this step is completed, you’ve officially agreed to sell your repayments.
Request an Advance
Step 5: If you need money immediately, ask for a cash advance. This will be a partial payment around $1,000 to maintain you over while until the process is complete. It can take up to three months to receive your lump sum payment.
Appear Before a Judge
Step 6: Get court approval. This sounds intimidating, but it’s not. The factoring company you’re working with is likely to make all the arrangements and prepare the paperwork so that you can appear before a judge in your county. You can expect to answer some questions to assure the judge this transaction is in your best interest. This task is essential for legal reasons. Among other things, the judge will consider the welfare and support of your dependents when deciding whether to approve the sale.
After the court approves the transaction, you will send a copy of the order to the administrator of your structured settlement.
Get Your Money
Step 7: Receive full payment, as specified in your agreement with the factoring company. This will likely typically happen within three to five business days of the court’s approval.
If you owe any past-due child support or have any tax liens, they’ll be subtracted from your lump sum before you can get the money.