A structured settlement is a form of financial payment made to a plaintiff as part of a lawsuit where a personal injury claim is either won or settled. The main feature of this is that the money is paid over time through a number of payments and not as a lump sum payment.
Even though these are payments come over a time period, that does not mean that they can not be changed into the lump sum option. That is where selling your structured settlement, or even a part of it comes in. There is a process to follow for this option.
Figure Out Your Financial Needs
The very first step is to decide the amount of money that you need. When determining if this is the right way to go, understand that if the money was taken over time, it would yield a higher overall payment. If you sell the structured settlement, the overall amount will be less because there are fees and other legal expenses. The company that is buying it also needs to make a profit, so the amount taken out will decrease what would have come to you in the end. The amount difference can be as much as half of what you would have gotten. Usually, it is not this much and runs about 60 to 80 percent of the original amount. This difference is the reason most people do not sell their whole structured settlement, instead only selling the amount they actually need. It is also an option to sell your settlement for a time period and then resume those payments again in the future. It is extremely important to decide on your needs because if you take too little, the whole process has to start over, which will require more legal maneuvers and more fees. It will also take additional time. There is also a chance that the judge may not honor the second request.
Determine Your Offers
Look at the offers that you get from various factoring companies. How much will they pay you for your structured settlement? As with many financial decisions, it is a good idea to get this information from several companies. That way you can take the best offer. Also, make sure that the company is reputable, so do your research. When talking to the various companies, have them give you the information on all the other expenses and fees. This allows you to figure out how much you will actually have to sell to meet your needs.
Evaluate Your Offers
Look at all the information you have gotten from the companies directly about their offers and then look at your own research. Search online at reviews of the companies, and possibly ask others what their experience has been. If you have questions, now is the time to ask and get anything answered. Always make sure to look at the fine print of the deal. After you are satisfied with your research, then make the decision about which factoring company you would like to work with.
Make Your Choice And Start The Process
After the decision has been made, there will be paperwork that needs to be completed. The paperwork required will start off by showing two forms of identification. Then the application must be completed. After that, they will need copies of both the original structured settlement agreement and the annuity policy. Only after all of this is done can they actually buy your payments.
Ask For An Advance If Needed
Since this process takes some time, you might need some money immediately. You can ask the factoring company for an advance on your sale to help you financially until the whole process is done since getting your lump-sum payment can take as long as three months to come through.
Get Approval By Judge
You will be required to meet with the judge in your county before the whole process is approved. Part of the job of the factoring company is to prepare the paperwork for you to take. This meeting is held so the judge can ask some questions and decide if this is an appropriate option for you. They will have your and your dependent’s ultimate best interests in mind when making their decision. If it gets approved, then the administrator from your structured settlement must get a copy of this order from you.
Receive Your Lump Sum
After everything is completed, then you will get your payment. The timeframe on this is usually about five business days after the judge gives their approval. It is important to note that any outstanding amounts such as tax liens and child support that are past due will be taken from the payment before you can get any of the money.
Selling a structured settlement may be an option to look into if there are some impending financial issues. It may be the best option at the time, however, there are many things to consider before going this route.