A structured settlement is where the beneficiary of money receives payments of a set amount for a set amount of time. This time can be anywhere from months to years. There are many times when the beneficiary of the structured settlement payments may choose to sell their structured settlement payments.
Here are nine important details that you should know before you decide to cash in your structured settlement payments.
- When choosing to sell your structured settlement payments, you have the option of selling all of them of just a few of them. For example, if you need to have access to $20,000 but have a total of $150,000 in payments available to you, you have the option of only selling the $20,000 worth.
- When you sell your structured settlement payments any monies that you receive from this is tax free. Any taxes that are imposed on this money is the responsibility of the buyer.
- If you decide to sell any or all of your structured settlement payments, they are sold at a discount.
- Once your selling process has begun, you can expect the process to be completed between four to sixteen weeks. On average most people will receive their money in about eight weeks.
- You should take into account inflation, and how it can affect your payments. If you are receiving a payment of $2,000 a month, for the time being that sounds like it will be plenty. But what about five years from now? Remember, your payments will stay the same regardless of inflation.
- Many people are under the impression that selling their structured settlement payments is illegal. That statement is false. There is nothing illegal involved in this transaction. Many contracts say on them that they can not be bought, or transferred. That is there for the protection of the buyer, and can be legally maneuvered easily.
- You should do your own independent research on any type of company with whom you are considering selling your structured payments to. It is important that you are dealing with a legitimate, and honest company.
- There are different types of structured settlement payments that may be sold. These types of structured settlement payments include: lottery payments, payments for an injury that are court ordered due to a disability, and life insurance payments.
- When you sell your structured settlement payments you are protected if the payer of the payments goes bankrupt, or defaults in anyway on the payments that you are to receive. After you sell your payments they become property of the buyer. Therefore if the payer does file bankruptcy or defaults on the payments it will not have any effect on you at all.
