A structured settlement company, structured settlement broker or a personal injury lawyer in your local jurisdiction will be able to give you more information on how to get cash from structured settlement compensation.
Collect your periodic payments as a lump sum .....
and get a structured settlement cash payout!
How to Sell a Structured Settlement Annuity for a Lump Sum
In all probability you will only ever get one chance to sell a structured settlement so it is important to get it right. This means getting the maximum possible value from it without having to put oneself through a great deal of stress to extract that value. Anyone awarded two structured settlements in one lifetime would probably deserve to be nominated for an Unluckiest Person in the World Award, as that would mean that they'd been subjected to two sets of life-changing and life-damaging injuries caused by the civil wrongs of others. It seems unlikely that any such person would ever be well enough to 'enjoy' any benefits of the second award, let alone be in a position to sell it.
Getting Court Approval for Selling Periodic Payments
The first thing you will need to do if you want to sell part or all of your annuity and get cash from structured settlement compensation is to obtain the authority to sell it, or at least check to see if you need authority to sell. In many jurisdictions the sale of structured settlements is regulated by law and will require the oversight and approval of a court. They may be a nuisance, but these rules and regulations are there to protect you from predators. You'll almost certainly need the help of a structured settlement professional to make an appeal to the courts, because knowledge of the local guidelines on acceptable reasons for approval is absolutely crucial. Provided that you can show that the sale is in your best interests, the court will issue an order giving you the authority to sell. Both the extent of the regulation governing the sale of periodic payments and what is likely to be viewed as in your best interests will depend largely upon where you live (and unfortunately may not include buying a new car!).
As the procedures for selling structured settlements are often fairly recent (in the US they have only been in place since 2002), general practice lawyers may not have much knowledge of this field. It is better to seek help from a specialist.
Another Stumbling Block?
There may sometimes be an issue with the insurance company responsible for the annuity payments. Some will only pay an annuity to the person for whom it was originally drawn up. This must be checked.
Do I Need a Broker?
Having got authority to sell, the next thing you will have to do is to get a quote (called a quotation in some countries), or better still several quotes. A structured settlement quote is a document issued by the prospective buyer stating the full value of the settlement in question, what they are prepared to pay for it as a cash lump sum and under what terms and conditions. Don't forget that court-approved sales are deemed non-taxable transactions and that they are normally tax free for both parties.
Anyone can sell periodic payments, be they part or all of a structured settlement, and there are two routes you can follow if you wish to sell yours. One is to sell it yourself; the other is to use a specialist broker who will do all the work for you. There will be no direct charge to you (the seller) because the broker charges the buyer instead. But in reality, it is you who will bear the cost, as all the buyer's expenses will be deducted from the cash price offered for the settlement. Whichever route you think you'd prefer, it is probably worth getting at least one initial quote on your settlement independently of a broker. Having dipped a toe in the water and familiarized yourself with the process of getting a quote, you will then be in a better position to judge as to whether you need the services of a broker. To do this need not cost anything as some companies offer free quotes. The main benefit of using a broker is that they'd probably be able to get a greater range of quotes on your settlement than you could manage yourself. This could translate into a higher cash offer for your settlement and the poor old broker might actually earn his fee. If, on the other hand, you want to avoid paying this expense out of your settlement and still extract the best possible offer for it, then you've plenty of work to do. Can you beat the broker at his own game? How much time and effort are you willing to put into it? Whatever you eventually decide, you should at least educate yourself on the subject so that you can "talk the talk". This will help you both to negotiate and to sense if someone is trying to lead you in a direction more suited to their interests than yours.
Finding the Right Buyer
So how do you actually collect your structured settlement cash?
Believe it or not, the easiest way to get structured settlement quotes, narrow down the field and find a structured settlement buyer is to use the Internet. Get on line and read through a few companies' web sites. There are links to many of them from these pages. You won't be restricted by your geographical location, and if you put the work in you will soon get a feel for the different attitudes, processes and ways of working of the companies involved. A good starting point might be to look for companies that offer free quotes. You will find that there are literally dozens of companies willing to buy structured settlements. The best strategy is to get as many quotes as possible and compare them against charges and services.
As the seller of a structured settlement you should keep in mind that potential purchasers will only make offers at levels they think will allow them a good profit on the deal. Understand that you will not get the full value of the settlement; the difference between the cash offer and the full value is the price of having the money up front as a lump sum and not having to wait for installments over the years. Your buyer will want to pay as little as possible for your annuity and will have the advantage if you only get one quote. They will also know that the seller of a structured settlement will have almost certainly never sold one before and may be unaware of the true worth of it. Some buyers are not above taking advantage of this. When it comes to negotiating with a prospective buyer, the more you sound as if you know what you're talking about, the better the cash offer you're likely to get. There are no easy shortcuts. If you want to get the best price for your settlement, you will have to put the time in and do the homework. Don't be in a rush; it just won't get you a good result.
Prepare yourself before you start negotiating. Find the relevant documents and keep them to hand, so that you have quick access to all the facts and figures you could conceivably need. You should at the very least know the total amount of the settlement and the payment schedule.
Issues of service and procedure should be considered as well as the cash on the table. For instance, ask each of the buyers of structured settlements how long the process is likely to take. When you reach the stage of having a good number of quotes for your settlement you will eventually have to make your choice. But by that time you will probably know with which companies you feel most comfortable. For some, that might count for more than getting the very last dollar on offer. Before you make a final decision, research each potential structured settlement buyer on your shortlist to make sure that they are reputable. Doing this properly should help you to avoid the unscrupulous and manipulative.
Be sure to ask questions about the following:
- the present value of your structured settlement and how it has been determined
- the tax implications of selling all or part of the settlement
- exactly what fees are going to be charged by the buyer
- do the terms of the proposed sale comply with the law?
At home, read through the papers on the proposed sale very carefully. Check for hidden charges: get an accountant to help you with this if you are uncertain about anything. Think it all over yet again and if you haven't already done so speak to a financial advisor to see what other options might be available that would enable you to get the money you need. It might be better to take a loan than to ransack your structured settlement.