Selling Your Structured Settlement ? Some facts You ... - Finance Moz

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Nowadays, there is a strong tendency of plaintiffs opting to sell their structured settlements in return for a lump sum of cash, rather than waiting for months and even years to collect their legal money. Whether being caught into the trap of urgent, substantial expenses, like extra medical bills, mortgage payments, students loans, etc., or planning some large expenses, such as a new house or vehicle purchase, settlement holders highly appreciate the idea of having full control over their finances.

Frankly speaking, any structured settlement sale is a rather complex transaction process involving numerous procedures and specifications. For people without specific education, it may be quite challenging to get into all the nuts and bolts of the process and ensure that the transaction goes smoothly and hassle-free. Below I?m going to share some facts on selling structured settlements that I hope you will find interesting and useful in making any related decisions.

What Is The Essence of Structured Settlements?

First appeared in Canada as a financial compensation for families whose children were affected by Thalidomide, structured settlements quickly spread throughout the United States, UK and Australia, where they are still used in various personal injury and product liability cases. However, structured settlements gained a special popularity in the US as an alternative to lump sum agreements.

In essence, a structured settlement is a financial agreement implying periodic installments paid over some period of time. As a rule, it arises as the result of a lawsuit: a plaintiff settles a case for the financial compensation (usually a rather large sum of money) and the court assigns a periodic payment obligation. Structured settlements may also be created through the purchase of one or several annuities. This is another popular kind of financial agreements intended typically to provide a stable future income. A person makes regular payments to an insurance company and this money continuously builds up without current income taxes though. After the predefined time period or when reaching the retirement age, an annuitant may reclaim his/her legal money.

How Long Does It Actually Take?

Have you finally made up your mind to cash out your future payments? You should now arm yourself with patience, since this transfer is not a quick process, taking at least 60 days to complete. If you are promised to get an immediate cash advance within a few days only, rest assured, it is no more than a smart trick and this is definitely not a funding company to work with.

The longest part of a structured settlement selling process is the court approval, which is imperative for its legal accomplishment: every single case is thoroughly reviewed to ensure the transfer doesn?t violate both federal and state financial laws and you are going to receive the adequate amount of cash. In such a way, the court process protects both a plaintiff and funding company. The terms may vary from state to state and in general this takes no less than one month.

No Credit or Employment Verification

Unlike traditional bank loans and some other financial instruments available in the field, structured settlement cash advances require neither credit history, nor employment verification. This is especially important to know for plaintiffs involved into personal injury, auto/moto accident cases and suffering from temporary or permanent disability. Rest assured, you will have to provide no income qualifications in order to sell your structured or annuity plan. The only thing that the court may check is your ability to provide for dependents.

What?s also important to point out, cashing out settlements is not lending at all ? you will receive money that is absolutely yours, while credits and loans are supposed to be returned with interest rates and involve credit history damage risks in case of payment delays.

Protection From Inflation Risks

Rather often, settlement holders disregard inflation risks and its inevitably depreciating impact on the money value. In fact, the money you have now is of pretty much more value than the same amount of money later in several years. If compared to the historical inflation, the interest fees you are going to pay to a funding company for the opportunity to get a lump sum of cash at hand now are usually considerably lower. Thereby, structured settlement cash out acts like an effective hedge against inflation, while your funding company bears all the associated risks.

Derek Wrend ? a marketing and PR manager at OzarkFunding.com, a direct funding company offering maximum cash for structured settlements and annuities.

Source: http://www.financemoz.com/selling-your-structured-settlement-some-facts-you-want-to-know.html

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