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Understanding structured settlements
A structured settlement is a financial arrangement typically resulting from a legal settlement, such as a personal injury lawsuit, where compensation is paid out in periodic payments over time instead of a lump sum. While these settlements provide long-term financial security, there are situations where you might need access to your funds earlier.
Ways to access your structured settlement funds early
Here are your most common options:
1. Selling your structured settlement payments
- Partial Sale: You can sell a portion of your future payments while keeping the remaining stream intact. This allows you to get immediate cash without completely eliminating your long-term financial security.
- Full Sale: If you need a larger sum, you can sell your entire structured settlement payment stream. However, this option should be carefully considered, as it means giving up all future payments.
2. Legal process: Structured settlement transfer
To sell your structured settlement, you must go through a legal process:
- Consult a financial advisor: Before making any decisions, it may be helpful to speak with a financial professional who can help you understand the implications.
- Find a reputable purchasing company: Research companies that specialize in purchasing structured settlement payments. Look for:
- Established reputation
- Transparent fee structure
- Positive customer reviews
- Proper licensing
- Court approval: The Structured Settlement Protection Act requires:
- A judge must review and approve the transfer.
- Ensure the sale is in your best interest.
- Protect you from predatory practices.
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Factors affecting your structured settlement payment sale
These are some common circumstances that may have an impact on your sale:
- Discount rate: Purchasing companies will offer less than the total value of your future payments.
- Tax implications: Consult a tax professional about potential tax consequences.
Potential reasons for selling
Common motivations include:
- Medical emergencies
- Home repairs
- Education expenses
- Business investment
- Major life changes
Risks and considerations
Before you try to sell your structured settlement payments, keep in mind the potential consequences.
Potential drawbacks
- Losing future financial security.
- Receiving significantly less than the total settlement value.
- Potential negative long-term financial impact.
Alternatives to consider
- Personal loans.
- Home equity lines of credit.
- Negotiating payment advances.
- Seeking additional financial assistance.
Legal protections
The state and federal Structured Settlement Protection Acts provides safeguards:
- Mandates court approval.
- Protects vulnerable individuals from exploitative practices.
State-specific regulations
Structured settlement payment sale laws vary by state. Some states have more stringent requirements or additional protections. Always check your specific state’s regulations.
Step-by-step process
If you’ve determined that selling your payments is in your best interest, follow these steps:
- Assess your financial needs
- Determine exact amount required
- Explore alternative funding sources
- Gather documentation
- Original settlement agreement
- Payment history
- Personal identification
- Proof of financial need
- Get multiple quotes
- Contact several purchasing companies
- Compare offers
- Understand full terms
- Legal review
- Consult an attorney specializing in structured settlement payment sales
- Review proposed transfer agreement
- Court hearing
- Attend court session
- Present your case
- Receive judicial approval
The takeaway
Getting access to a lump sum in exchange for selling your structured settlement payments is possible but complex. It requires careful consideration, professional advice, and a thorough understanding of the financial and legal implications. Always prioritize your long-term financial health and explore all available options before making a decision.
By following the above guidelines and seeking professional advice, you can make an informed decision about accessing your structured settlement funds early.
Let Peachtree help
At Peachtree Financial Solutions, we’ve helped thousands of people get their money sooner by purchasing their structured settlement 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 annuity is unique, which means every payment sale will be different, they all have the same basic five steps:
- Call one of our representatives.
- Receive a free, no-obligation quote for the sale of your payments.
- Review and sign the purchase agreement.
- Court order process.
- 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.
