When it comes to your money, most people assume that how it’s used is really up to them. That includes structured settlement payments and annuities. However, that’s not actually the case. Most states now have laws in place governing how structured settlements must be handled, including sales (technically transfers). Can a court actually reject a structured settlement transfer? The straightforward answer is yes, the court can deny any transfer, but there’s more to the story.
To really understand what’s going on here, you need to know more about the history of the industry. Many states and consumer advocate groups have long taken a dim view of structured settlement transfers due to the predatory nature of some companies operating in the country. These companies preyed on the unwary and the desperate, convincing them that selling structured settlements was the best option for their financial situation.
Most states have now enacted laws to protect consumers from these companies. The immediate upshot is that all transfers (sales) must go through litigation – the case has to be heard by a judge. The judge will then determine if the transfer is in the payee’s best interests and whether or not to allow the sale to move forward. In many cases, the judge denies the transfer. Why is this?
Selling your structured settlement gives you access to a lump sum of cash immediately. This can be enormously beneficial, particularly if you are facing serious financial difficulties. Whether you’ve lost your job, have mounting medical bills or need to get your creditors off your back, that lump sum can be essential. However, you should never attempt to sell your payments on your own – you need to work with an expert. Using structured settlement brokers offers a number of essential advantages.
You’ll find that not all structured settlement offers are the same. Some companies might only want to buy part of your payments. Other companies might charge you a steep percentage of your total amount, leaving you with less money than you should have. Still other companies might not have a particularly good reputation. Working with structured settlement brokers ensures that you have help choosing the offers that best match your specific situation and financial needs.
Another advantage to working with structured settlement brokers lies in the speed you’ll have in getting offers. If you’re attempting to do this on your own, it can take a very long time just to find reputable buyers, much less start receiving offers for your settlement. When you work with a quality broker, you can start receiving offers almost immediately. This increased speed is highly beneficial for anyone struggling with a less than ideal financial situation. Obviously, the sooner you can get offers, the sooner you can begin the process and receive the cash you need.
If you have been injured in an accident that was not your fault or have been the victim of shoddy manufacturing quality, you may be entitled to repayment for your pain, suffering and injury. The court will evaluate your case, listen to both sides and then make an award judgment. In some cases, this can be a very significant amount of money. However, if you’re thinking about receiving that money all at one time, it might be best to rethink things. Chances are good the court isn’t going to award a lump sum. Why do courts avoid lump sum settlements?
In many instances, courts avoid lump sum settlements because of the amount of the settlement and the detrimental effect it would have on the defendant’s situation if it were awarded all at one time. To avoid completely ruining a company, courts will usually award a structured settlement, allowing the company to pay out slowly, over a long period of time.
Sometimes, accepting a lump sum payment isn’t a good idea for you, particularly when there’s a heavy tax burden to bear. In some cases, you won’t have to pay taxes on a lump sum settlement, but that’s not always the situation and you’ll need to speak with your attorney to determine if accepting an offered lump sum settlement makes sense for you.
While getting your money upfront might seem like a good thing (and sometimes it’s necessary), there are some benefits to courts that avoid lump sum settlements. Many awardees find that they spend all of their settlement very quickly, leaving them nothing to live on afterward. A structured settlement avoids this completely.
Even if the court decides that your settlement should be in regular payments rather than as a lump sum, there is a light at the end of the tunnel. There are companies out there that will buy your structured settlement agreement in exchange for a lump sum of cash (less a certain percentage). It’s best to approach this situation with a trusted broker who understands the industry and will help you get the best deal possible for your structured payments. Going it alone here is not advisable, but with the right help from an expert, experienced brokerage, you can have the financial footing that you deserve.
The choice to accept a structured settlement might seem irreversible, but it’s not. Many people find that while a structured settlement makes sense on paper, it doesn’t work well for their personal situation. From back bills to paying for their children’s education, that money could be put to use right away in their lives. There are companies out there that buy structured settlements, though, so you’re not really locked into those periodic payments. What should you know when choosing between companies that buy structured settlements?
The most important thing to remember when selling structured settlements is that not all buyers are the same. Just as with any other industry, there are worthwhile companies and those that should be avoided. How do you tell the difference? The best way to make a wise choice is to compare your options. By comparing offers from various companies, you can determine which ones offer the best benefits.
During your comparison of different companies that buy structured settlements, it’s vital that you compare several key factors. For instance, you need to ensure that all offers you consider are in compliance with state and federal law. You also need to ensure that you’re working with a company that offers the most cash possible for your structured settlement. No company will offer you 100% of the money that you would eventually receive over the life of your payment program, but you can choose one that offers the chance to receive most of it.
Your annuity payments certainly help offset your financial situation, but sometimes they might not be enough. If only there were a way you could get a lump sum instead of small, ongoing payments. Actually, there is a way to do just that. You can sell your annuity. However, that’s not necessarily the best choice for you – there are things you need to know before you sell your annuity to ensure that you’re making the right decision.
One thing you need to do before anything else is check your state laws in regards to annuity sales. Each state has its own requirements, in addition to federal laws governing the transfer of annuities, and you’ll need to make sure you’re in compliance with all of them. If necessary, contact an attorney to help you understand the process, your obligations and the laws that apply to you.
Another consideration here will be the amount of money you can get for your annuity. Don’t think that you’ll get 100% of the money remaining to you – it doesn’t work that way. Most funding companies offer a percentage of what you have coming, but there are other mitigating factors, including how your payments are set up, the total amount of the annuity and more. You’ll also find that funding companies vary just like banks in regard to the terms they offer, so shopping around is pretty important. Just as you would compare lenders, you need to compare funding companies to arrive at the best choice for your needs.
Selling annuities is not new – it’s been happening as long as structured payments have been around, though it has become more common in recent years. For those who find that their structured settlement doesn’t help with a crippling financial situation, finding annuity buyers is important. How do you go about doing that, though? Actually, it can be as simple as going online to find annuity purchasers, but there are a few things you should know.
Before you hit the Internet to find a buyer, it’s important to arm yourself with information. For instance, don’t believe all the hype from late night infomercials. Selling annuity requires more than just a phone call. The entire process can take more than a month, and is subject to a judge’s decision on whether the sale can move forward. Going online to find annuity purchasers should only be done after you have thoroughly researched your situation.
Another important tip for those going online to find annuity purchasers is that the process is simpler and more efficient when you have help. Don’t look for help from the purchasers themselves, though. Rather, you should work with a brokerage that can help you connect with the most reputable buyers out there. Not only does working with a brokerage ensure that you are able to start receiving offers immediately, but that you can work with some of the better buyers in the market. Going it alone means that you’ll have to rely on your own expertise, which is likely not as robust as it should be.