Five Tips When Selling Your Structured Settlement

Author: Woodbridge Investments
Date: Jul 1, 2009 - 9:35:46 PM

RSS Feed

You may have received structured settlement payments through personal injury or workers’ compensation claims.  You may be wondering if you should try to sell your settlement payments in exchange for a lump sum of cash.  Be aware, however, that despite the claims of advertisers, the selling your structured settlement may not always be possible – and even if it is possible, it may not be an economically wise decision.  There are some benefits to selling structured settlements, but also some hidden costs of which you should be aware.

Tip #1: Make a Wise Settlement Decision from the Beginning

If you have the option, it is always best to make a decision about receiving structured settlement payments from the start.  You may, from the beginning, choose to press for a lump sum payment vs. periodic payments.  This is not just black and white either – you may negotiate for a combination agreement.  You may want to get a smaller lump sum plus periodic payments, or decide that you will need a lump sum at a future date.  You may want to consult with a tax adviser and see what arrangement makes the most sense from a tax perspective.  If you are in this stage of the settlement, remember: now is your best time to decide.  Should you decide to sell your structured settlement at a future date, you will be losing a percentage of your money to companies that buy those structured settlement payments.

Tip #2: Watch Out for the Tax Man

Although you may be considering selling your structured settlement, it is important to consider that it was probably constructured from the beginning to provide you with significant tax advantages.  As a result, you may be in for an unpleasant surprise if you decide to receive a lump sum payment.  Check with a competent tax adviser to see what the ramifications are in your situation.

Tip #3: Beware of Hidden Restrictions on Selling Structured Settlements

Many people do not realize that federal regulations can limit and restrict the sale of structured settlements.  In addition, approximately 60% of the states have some laws on the books which restrict the sale of structured settlements.  Find out which laws apply to your situation.  You may have to obtain court approval for the sale, and the process of transferring settlement payments to a buyer may be highly regulated by your state.  Also, if your structured settlement was issued by an insurance company, watch out for hidden clauses.  They may state that payments cannot be sold to another party.

Tip #4: Don’t Take the First Offer You Get

This seems like common sense, but many people attempting to sell structured settlements are excited by the prospect of receiving a huge lump sum of cash.  But it pays to shop around.  Even if your first offer seems excellent, get quotes from at least 2-3 other buyers of structured settlements to see if the first offer can be topped.  Do your research and make sure you are dealing with a reputable buyer of structured settlements.  If one buyer’s offer is way better than the others, be alert – if it seems too good to be true, it just might be.

Tip #5: Get a Good Lawyer

When dealing with such a large amount of money, consulting with a lawyer can pay for itself many times over.  A lawyer experienced in dealing with settlements can tell you if your buyer’s offer is reasonable, as well as if the terms of the purchase agreement are right for your situation.  He or she can also protect your rights, in case any of the parties in the transaction are not cooperating or sending payments according to the agreed contract.

RSS Feed

Related Articles...

Last Will & Testament - Who Needs To Write A Will Aug 23, 2010 - 8:50:52 AM Everybody? Not quite. There is one class of people who need to make a will, or more technically correctly, a last will and testament. Bear in mind that this document would tell the courts in as much detail as you care to provide, how you want the things in your life to be distributed among the people in your life. We are hereby concerned with a certain class of people, those who care how their assets would be distributed after they have left this earth.... [Read the full story]

Protecting Yourself from Credit Card Fraud Aug 18, 2010 - 5:24:55 PM Credit cards are some of the most convenient financial tool that many people are using today. It is true that using credit cards is very convenient because you will never have to bring much money when you get out from the house to shop. With these cards, buying things has been made easy. However, credit card owners are also subject to being victimized by fraud or scams. Allowing this to happen will cause them so much financial burdens in the future. This is why if you own a credit card you need some tips in protecting yourself from credit card fraud.... [Read the full story]

The Many Benefits Of Banking With Credit Unions Aug 3, 2010 - 5:47:48 AM Credit unions have been receiving notoriety as of late for their effort to help members save money. Credit unions are  cooperatives, where people pool together their money. Individuals of a particular credit union will have some thing in common. They could live in the same town, zip code, state, work at the same place or in the same field. Cash that are earned from interest rates from loans and investment products are given back to the members.... [Read the full story]

Obama Mortgage Refinance - Eligibility Guidelines Jul 27, 2010 - 9:22:12 AM Select banks have been entrusted with the responsibility of implementation of the program. To avail these benefits there are qualifying requirements. Obama refinance plan requires individuals to meet the eligibility criteria set in the plan guidelines, go through a 90 days trial and then have permanent modifications. The biggest advantages are in the form of lowered interest which makes payments affordable and gives an opportunity to an individual to retain home. Millions of people are facing foreclosure today in wake of the economic slowdown and tumbling property values. The number of Americans owing more than the value of their house is on the rise. Obama’s program is slated to be the biggest help to these millions. However as there are guidelines and qualifying and only... [Read the full story]

Newest Articles All Topics

Latest Articles in All Categories

My Take on Video Editing

Hip Hop Beat Making Software, 3 Things Crucial To Know Before You Buy

Posting a Resume Made Easy