Prefer a lump sum structured settlement?
Unfortunately for some, a structured settlement is often agreed when a plaintiff is awarded a large sum of cash as compensation for an injury.
In the case of personal injury compensation, these settlements were introduced by courts to prevent the person responsible for the plaintiff’s injuries from going bankrupt as a result of their liabilities.
While a structured settlement is a good idea from this point of view, what about those plaintiffs who would prefer to receive all the money in one go as a lump sum structured settlement, rather than waiting to receive the installments?
Fortunately, it’s possible to sell structured settlements to specialist structured settlement companies, meaning it’ s not necessary to wait several years to receive all of your compensation.
How to sell a structured settlement
Selling your structured settlement isn’t that difficult, but it does take a little time due to the complex legalities of the transaction. The first thing in any case is to find a buyer that is willing to swap your structured settlement for cash.
Perform a search and contact as many companies as you can to get a wide range of different quotes from them.
Once you have the various quotes on offer you can do a little research about the various companies to make sure they are legitimate, and then make a decision over which one to choose.
Once you make a decision, the company will request to see the paperwork pertaining to your structured settlement before interviewing you either at their branch or over the phone.
Following this, the company’s legal team will review your policy and the answers you provided them in the interview before coming up with a concrete offer for your lump sum structured settlement.
Should you accept the offer, the company will fix a court hearing in order to obtain the court order necessary to complete the structured settlement sale.
What happens in court?
Try not to be too daunted about going back to court – this is a necessary part of the process, whereby the judge will decide whether or not selling your structured settlement is in your best interests.
The judge will expect you to have a good reason for the sale however; acceptable reasons include paying bills that have gotten out of control, making mortgage payments to avoid a foreclosure, paying a deposit for a new home, financing repairs to your home, propping up a failing business, paying for medical treatment or covering education fees for yourself or a member of your family.
Costs of obtaining a lump sum structured settlement
Beware that cashing in on your structured settlement is not cheap, and you could lose out on a fair amount of its value.
Say your settlement is worth $250,000, paid for over 25 years. This means your monthly payments work out to be around $900 - $1,200 per month.
Now let’s say that you are looking to obtain $30,000 now as a lump sum. This will not cost you $30,000 in future payments, as the buying company will value these less than they are worth.
Typically in this scenario, you can expect to give up around $50,000 (at $1,000 per month for 50 months) to get your hands on $30,000 right now.