Structured settlements refer to payments awarded to a claimant in a civil law suit as a result of personal injury and are meant to be compensation for lost income. This money is usually paid to the claimant by a life insurance company. Instead of the person receiving all the amounts awarded by the count in one go, the payments are structured over an extended period of time. This arrangement offers a stream of tax free payments to the recipient. It provides a better future guarantee of money than a one-off payment which can be spent and depleted quickly. Money in the form of structured payments helps the recipient to meet vital expenses such as medical expenses among others. However, there are times when a beneficiary of this arrangement needs more cash than is being received in each specific installment.
Structured Settlements Cash Out
The good news is that you can sell your settlement payments to raise the amount of money you need. But getting your structured settlement cash is not just a matter of looking for a willing buyer then selling whatever amount
of payments that you want. Rather, this it is a process controlled by the court and comes at the discretion of the judge due to a regulatory framework that requires that the transaction must be sanctioned by the court.
Basically, once you decide to sell your settlement, the next step is identify the most appropriate buyer (how to go about selecting the best buyer is discussed later). The buying company will then negotiate the terms and conditions of the transaction after which they will file a petition in court for transfer of the settlement. You must prove to that court that your need for the lump sum is legitimate. You will also have to present accurate calculations justifying the amount of money you need from the sale.
Why people sell their structured settlements
People sell their structured settlements to address pressing needs or to respond to economic realities. An increase in mortgage, buying a new home, unexpected medical expenses, paying off debts and the effects of recessions are some of the reasons why people opt to sell their settlements. During such periods, the cash crunch puts high pressure on the budgets of many individuals and the structured settlement offers a convenient cushion.
Structured settlement companies for 2017
As already implied, there are legitimate companies that buy structured settlements from willing sellers. In general, every time you contact any of the companies offering this service, you will interact with a representative who will listen to your requirements. The interaction will offer you an opportunity to learn all that you need to know about the company and the terms of the transaction. Most importantly, the representative will review the settlement, circumstances and the reasons why you need the money. If a decision is made to proceed with the transaction, the representative will take the deal to the next level. The agent will offer you an upfront amount to surrender your stream of payments, as well as a discount rate which in simple terms compares to the interest you would pay on a usual loan. Once an agreement is arrived at, a petition is then filed in court. A judge listens to the petition and arbitrates the amount of cash you will finally receive.
How to choose the right structured settlement company
Your first step should be to check the track record of the companies in your list. The Better Business Bureau is an excellent resource for this purpose. Look at both the positive reviews and the complaints and the ultimate grading of the company by the customers. Shun C-rated companies. As much as possible go for an A-rated company. You can also talk to friends and relatives who have used the services of the company you are inquiring about. Whichever approach you use, the critical aspects to consider are the quality of service offered by the company and the discount rate that the company gives; the lower the better it is for you. Some of the leading structured settlement companies include:
- JG Wentworth: this is one of the world’s biggest buyers of structured settlement payments. Between 1994 and 2009 the company handled several billion dollars in payment transfers. Other than structured settlements, the company offers a range of other related services such as purchase of lottery winnings, personal loans, prepaid cards and mortgage loans.
- Olive Branch Funding: this company focuses on buying structured settlements, annuities and lottery winnings. Olive Branch Funding provides a cash advance on the sale of the settlement as you await court approval of the petition. The company does not offer any other kind of financial products.
- SenecaOne: this company prides in having A+ Better Business Bureau rating and is a member of the NASP. This is the only professional organization for participants in the secondary market for these settlements.