Hidden costs to consider

The following expenses are less immediate but equally important when it comes to selling your structured settlement…

1. Tax implications

Potential cost: Varies based on individual circumstances

While structured settlement payments are usually tax-free, selling your settlement might have tax implications. Consult with a tax professional to understand potential tax costs.

2. Loss of future financial security

Potential cost: Intangible but significant

By selling your structured settlement, you’re giving up guaranteed future income. This could be costly if your financial situation changes unexpectedly.

3. Opportunity cost

Potential cost: Varies based on financial markets

The lump sum you receive could potentially earn returns if invested wisely. However, these returns would need to outpace the discount rate applied to your settlement to be worthwhile.

Factors influencing the overall cost

Several factors can influence how much it costs to sell your structured settlement:

• The amount you’re selling: Selling a larger portion of your settlement often results in a better discount rate.
• Payment schedule: Payments due sooner are typically valued higher than those far in the future.
• Market conditions: Interest rates and economic factors can affect discount rates.
• Your state’s laws: Some states have more stringent requirements, potentially increasing legal costs.
• The purchasing company: Different companies offer different rates and fee structures.

How to minimize costs when selling a structured settlement payment

To keep costs down when selling your structured settlement:

• Shop around: Get quotes from multiple structured settlement buying companies to find the best discount rate.
• Only sell what you need: Selling a portion of your settlement rather than all of it can help minimize the impact of the discount rate.
• Negotiate fees: Some companies may be willing to reduce or waive certain fees, especially for larger settlements.
• Understand the process: Being prepared can help reduce legal costs and prevent delays.
• Consider alternatives: Explore other financial options before committing to selling your settlement payments.

The role of Structured Settlement Protection Acts

Most states have enacted Structured Settlement Protection Acts (SSPAs) to protect consumers. While these laws can increase certain costs (like requiring court approval), they ultimately serve to ensure fair deals and prevent exploitation.

Key provisions often include:

• Mandatory disclosures of the terms of the transaction.
• A required cooling-off period allowing you to cancel the agreement.
• Court approval requirements.
• Independent professional advice in some cases.

Before making a decision…

Selling your structured settlement is a major decision that should not be taken lightly. Consider the following:

• Carefully evaluate your financial needs and long-term goals
• Get quotes from multiple companies
• Understand all costs involved, including hidden and indirect costs
• Consider consulting with a financial advisor or lawyer
• Explore alternatives to selling

The takeaway

Remember, the cheapest option isn’t always the best. Focus on finding a reputable company that offers a fair deal and guides you through the process transparently. By understanding the costs involved and carefully weighing your options, you can make an informed choice that best serves your financial future.

Let Peachtree help

At Peachtree Financial Solutions, we’ve helped thousands of people get their money sooner by purchasing their future payments for a lump sum of cash. Selling your payments is a regulated process and we have a lot of experience with these transactions. And while every structured settlement is unique, which means every payment sale will be different, they all have the same basic six steps:

• Call one of our representatives.
• Receive a free, no-obligation quote for the sale of your payments.
• Review and sign the purchase agreement.
• We process the agreement with your insurance company and local court.
• A judge reviews the transaction and, if approved.
• You get your cash!

Why should you choose Peachtree?

It’s all part of something we call the Peachtree Promise: our experienced, dedicated representatives listen to your goals and clearly explain your available options. We meet you where you are without judgement and work hard to help you meet your financial goals. Getting your quote is completely free, and you’re under no obligation to sell to us if you aren’t completely satisfied with what you hear.