Selling a structured settlement is not an easy task. There are many restrictions put in place and some states do not allow them to be sold in the first place. But keeping a structured settlement gives you no money until another your next payment comes in. If someone on a structured settlement wants to buy something expensive such as a car or a house and their structured settlement payouts are not enough to live on as well as to make the purchase many of those people will sell their settlement.
Others sell their settlements because they need money as soon as possible. This will result in a lump sum buyout, but the less care put into negotiating the buyout the less money you will get.
First of all, to start selling your structured settlement you should get an independent lawyer. If the lawyer has any connections to a structured settlement firm they will go to that firm and not look at other companies that could have given you a larger lump sum. After getting your lawyer, you need to get quotes from structured settlement companies to see who is going to give you the most for your settlement. After getting quotes you need to decide who offers the most. Then you will have to contact the firm and fill out the proper paper work. It is a good idea to have your lawyer at the meetings so you are not being cheated out of any of your money. After that, the firm will offer you a lump sum for the rest of your structured settlement. After you accept that amount the firm will take it to court to make sure that it is legal. Then after court approval you will receive your money.
Selling your structured settlement is not always possible depending on where you live and what type of settlement you have. You should find a lawyer before you even start to think about selling your settlement. This is due to the Structured Settlement Protection Acts found in most states.
The Structured Settlement Protection Act regulates the sales of structured settlements. Under this law the structured settlement can only be sold if the sale has been court approved. Only one third of states in America have not adopted this law. Also, if the settlement is tax-free the federal government has restricted the selling of your annuity. One of the first things you should do is look for a lawyer to see if it is even possible to sell your structured settlement. If the insurance company that pays out the settlement does not transfer the annuity to a third party, therefore the settlement can also not be sold. There are companies that are willing to buy your structured settlement if it can be bought. They will try and take advantage of you if you do not know how much the cash value of you settlement is worth.
Calculating the Cash Value of Your Settlement
It does not matter how good your lawyer is or how well you can negotiate. If you sell your structured settlement you will not be able to get all of the money your settlement is worth in a lump sum. Selling your annuity is like getting a mortgage from a bank. The bank will give out you a $100,000 mortgage. So let’s say you get the $100,000 mortgage and then have twenty years to pay it off at $800 a month. So you have 800(Dollars) X 12(Months) X 20(Years) which means at the end of the twenty years you pay the bank $192,000. This means that the bank is making $92,000. This is exactly how companies that buy structured settlements function. They will give you what seems to be a lot of cash now, but it is much less than what you would get if you held onto the structured settlement until it paid out in full. So if you decide to trade your stream of income for money today, you get a percentage of what you would have received had you continued to get your money over time. How reduced will that amount be? This is discounted value will depend on what kind of discount is given. If there is a large discount value the less money you will receive. This is like a higher interest on your mortgage. This “interest” depends on how much return the buyer wants to make in their investment. You will pay more for less or in this case you will receive less while the company buying your settlement still makes the same amount. This is a price that you will have to pay for wanting a lump sum. You will have cash for investing or expensive purchases, but you will not get as much as your settlement promised.
Selling your structured settlement for cash today will on paper make you lose money, but in reality it may actually save you money. As time goes on money continues to inflate. One dollar twenty years ago, in 1992, now has the buying power of $1.64 today in 2012. Money is losing its value as time goes on. That means that if you had a structured settlement that was to completely pay out in fifty years and you sold it now the inflation rate could give you more buying power than completing the structured settlement. If you had a fifty year settlement in 1962 that paid out to $100,000 in 2012 would mean that if you received a lump sum of anything over $13,165.24 in 1962 you would be making more money due to inflation. So if you were to get a $50,000 lump sum for your $100,000 structured settlement, in 1962 fifty years ago, due to inflation that would give you the same buying power as $379,788.08 in 2012. That is because money losses its value as time passes by so sometimes it is better to sell your structured settlement.
Major Structured Settlement Companies
To get the most money for your structured settlement you should get quotes from the major structured settlement companies. This will show you your options as well as how much you can expect to get out of your structured settlement.
STRUCTURED SETTLEMENT CASH
When selling a structured settlement, Structured Settlement Cash is the right choice to deal with. They will take your information and do all the work to find you the best quote for your lump sum.
Typically they will get multiple quotes so that you can be sure that you get the maximum amount of cash when you sell your structured settlement and part with your periodic payments for a lump sum.
STONE STREET CAPITAL
“Cash Now from the Cash Cow” This company has been in business since 1989. Stone Street Capitol was accredited by the Better Business Bureau in 1996 and still is. They have received poor rating for its customer service. Stone Street is owned by JG Wentworth. They do pressure you into sales and pitch sales at you. They ask how much you need and by when. Stone Street is not one of the best customer service experiences.
JG Wentworth has grown to one of the largest structured settlement companies around today, ever since it opened its doors in 1992. JG Wentworth has been accredited since 1996 and paid for their rating. JG Wentworth is a big company with a poor reputation, and they do not have as good of customer service, like Stone Street Capitol. But do not count on JG Wentworth they have a long and strong history of less credible service.
CBC SETTLEMENT FUNDING
CBC Settlement started in 2004. It is rated by the Better Business Bureau and has been accredited since 2009. CBC is a member of the National Structured Settlements Trade Association. Since opening CBC has focused on running a strong business with its center of attention on customer service. CBC is not time tested, nor do they show any professionalism.
WOODBRIDGE STRUCTURED FUNDING
Woodbridge Structured Funding opened in 1993. It is rated by the but has only been accredited since 2007. Woodbridge is not as straightforward as the previous companies. They give you a sales pitch rather than useful information. Woodbridge has semi knowledgeable staff and similar customer service, but you may want to consider a company that does not try and push the sale onto you, rather than letting you decide where to go.
PEACHTREE SETTLEMENT FUNDING
Peachtree Settlement Funding was founded in 1996. Is has been accredited with the BBB since 1998 and also pays for their rating. Peachtree focuses on pushing sales of cash payments and less on quality. They do not have the best customer service by any means. Even though they have been in business for a long time, they are not an easy company to work with unless you have a high enough settlement, but even then you probably are not getting the best quote.