How to Sell Structured Settlement Payments

2007-03-08 10:33:40

( Financial )



Structured settlements can come in the form of compensation from a medical malpractice or personal injury settlement. A structured settlement is a way of paying compensation to an injured party in the form of periodic payments, as opposed to cash settlement where a lump sum amount is received. In order to guarantee a regular stream of payments, the person paying for the compensation must purchase an annuity policy to guarantee that future payments are met.

Most people in search of funds to purchase a home, to fund their child’s education or to pay for outstanding debts do not realize that there is a way to sell structured settlement payments in exchange for a lump sum amount of cash, and that they can choose to sell the entire amount of their settlement, or only a part of it.

In order to sell structured settlement payments, you will need to follow certain legal guidelines. You must obtain legal assistance from a lawyer who can help you draw up a transfer and assignment agreement that will provide information on the price and terms of the sale. Legal assistance is sought to protect your rights, to see whether the agreement that will be drawn up is reasonable and whether the amount of the lump sum cash settlement is adequate.

After this document is drafted the settlement broker may then find someone who would be interested in buying your structured settlement. A settlement broker can assist you in locating the highest offer possible for your structured settlement payment at the fastest time possible (it normally takes months before you receive your lump sum cash). Once a sale has been finalized, a judge must approve the transaction before the sale can take place.

Do keep in mind that when you find a party that is interested in purchasing your structured settlement, that the company you sell to is financially sound and reputable.

Finally, you must note that when you sell structured settlement payments that the money that you will get from the sale will be much lower than the value of the actual structured settlement payment if paid out through the term of the annuity.


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