Selling a structured settlement

So you think you’re ready to sell off a structured settlement? Don’t allow the idea of a one-time, big-time cash payment render you blind all the considerations that have to be carefully factored in before you go ahead with the sale.

Although it may not seem that you’re selling off a huge sum of money, since it’s spread out over an extended period), you are. It’s important to keep yourself protected, and you can never be too cautious with your money. While there are indeed honest buyers and brokers, there are also companies or individuals who want nothing more than to take advantage of your need for fast cash. 

Is your buyer trustworthy? 

AWhat should you know before selling a structured settlement? The list below briefly discusses the matters you should investigate before selling structured settlement. Keep yourself covered!

The number of companies offering cash payment for structured settlements is steadily increasing. Although a buyer’s promise of “quick” or “huge” cash can instantly attract you to sell them your structured settlement, it pays to dig deeper and safeguard yourself. Set up a meeting with the company’s broker and get a feel for the broker and the company. Here, intuition and gut feel should be trusted. Remember, if something is too good to be true, it probably is.

To back up pure gut feel, get in touch with your local Department of Consumer Affairs, as well as the Department of Consumer Affairs in city where the broker’s and company’s head offices are located. Check if any lawsuits are pending or have been filed against the company. Establish that the company is backed by substantial and legitimate funding so as to duly receive your money after surrendering over your settlement rights to them. Also ensure that the company is ethical, and that it won’t try to get back at you if they encounter any difficulties obtaining your settlement payouts later on.

Are you getting the best deal?

This is something that you should ask yourself especially when considering an offer from a prospective buyer. This would often have the effect of prolonging your search for a buyer. And that is actually a good thing. The more time and effort you invest in searching for a good buyer, the better value you’ll get for your structured settlement.

Is your broker experienced and knowledgeable?

Find out how long the broker handling your transaction has been in the industry. Not just any industry—specifically, in the business of selling or brokering structured settlements. The industry, and indeed the transaction itself, is complex by nature. A mere certification is not enough. Many “certified” structured settlement buyers are actually just fresh from a certification course and don’t have any actual experience brokering a transaction. Mistakes made by an inexperienced broker have the potential to hurt you terribly, finance-wise. Make sure that your broker has a solid track record. Ask for references and spend the time to call or meet the broker’s past clients.

What are the hidden costs?

Total up all the remaining payments on your structured settlement. The cash payout you’ll be getting for the sale will be much, much lower than that. That’s because of attendant administrative and legal fees, which will be deducted from your lump sum. Basically, you can’t expect your lump sum without shelling out some money first. This is one reason why selling a structured settlement is not the best option for those requiring—and expecting—a large amount of money.

How long will it take?

Anyone that tells you that you can get your money in a matter of days is plainly lying! Selling a structured settlement can take as long as 90 days (several months) or even longer. This is chiefly because a court order is required in 38 states before a structured settlement can be sold. This is to make certain that you (as the seller) are adequately protected throughout the sale. You’ll also need to take time to compare the offer you received to those from other companies. Last, but definitely not least, there is the ever-present paperwork that goes with selling a structured settlement.

NEXT ARTICLE >>