Structured Settlement

Understanding Structured Settlements

By April 3, 2020 May 26th, 2020 No Comments

Learn about Buying and Selling Structured Settlements

learn structured settlement

Structured settlements are a type of financial agreement where a person receives small payments over time by selling structured settlements until a certain amount has been reached. Usually, such arrangement happens when insurance companies settle claims or perhaps even in civil cases where paying a lump sum by the practice of purchasing structured settlements would cause the losing party some financial hardship and prevent them from paying any amount to the winning party. These settlements are usually very detailed and exact and both parties have to agree to it. Many judges and courts simply think that a structured settlement in a better alternative to straight lump sum payments. Many insurance companies prefer this also because it helps to manage their cash flow while making sure everyone gets covered.

How to Buy Structured Settlements

Believe it or not, anyone can buy structured settlements from other people. Some people who receive such payments would be willing to hand over the payment to another party in order to get a lump sum, minus a fee or percentage. The buyer gets a guaranteed regular payment of cash with some interest percentage while the seller gets a lump sum of cash he or she may need or want.

There are a few steps you need to follow in order to buy structured settlements:

1) Review offers:

There are some companies that broker such deals and they will give you several offers that might meet the criteria of what you are searching for.  Ask the brokering company what their terms are and if they take verbal offers. That way, once you find an offer, you can reserve it.

2) Fill up paperwork:

The next step involves filing formal paperwork, usually a purchases information worksheet and in many places you have to follow state and of course, federal laws on how to make a formal offer to buy structured settlements.

3) Sign the purchase agreement:

Once the broker receives your purchase info worksheet, they will send you a purchase agreement that you must sign and return to them. The agreement usually lays out the terms of the relationships, the transaction process, and the terms for how the fund will be handled.

4) Transfer of funds:

Once the account is ready, you have to agree to the transfer of the funds. You have to sign documents and forms to get this ready. Then you usually have to surrender a deposit and then wait 30 to 90 days for closing.

5) Wait for court date and approval date:

The process of buying a structured settlement has to go through a court. The broker will inform you of these dates, plus when the originating party acknowledges the sale.

6) Pay the balance:

You must pay the remaining balance of the full amount 15 days before the court date.

7) Closing:

Finally, the closing process can take place. The court agrees and approves that changes to the structured settlement agreement. The seller receives the money and you get the necessary paperwork to prove that the payments should now go to you.

Structured Settlement Seller Checklist

structured settlement seller checklist

Now, if you want to sell your structured settlement, there are a few things you should know. There are many companies and individuals looking to buy settlement agreements and it’s hard to choose which one is the best. Make sure you are going through a reputable broker or company, even if the buyer approaches you by yourself. Here are a few things you should look for:

  • Courteous and helpful customer service
  • Good or fair payout and accurate offer
  • A thorough explanation of timeline
  • Knowledge of pertinent laws and regulations
  • Good reputation
  • Transparency
  • Gives good recommendations for consultations with other experts.

Why Buy Structured Settlement Annuities?

Now, some people want to know what the benefits are exactly when you buy structured settlements. Well, there are several. First, you can get higher percentage yields than you would with savings accounts and even some mutual funds. Another good reason is that you can count on the fixed payments as a form of income. That means even if you lose your job, you can still count on money coming in. The source of the money, usually an insurance company, has to be vetted in some way. They must be regulated by the state and most of the companies have an S & P rating no lower than A-. Some people also like the fact that they have complete control over the process. They get the settlement payments directly from a reliable source and the broker doesn’t hold the money at any time. Of course, the best reasons to hold any type of investment is to increase your personal wealth. Almost anyone can use and buy structured settlements, from regular employees to trusts and foundations and even group investors. And when you increase your own personal wealth, while you might not retire early because it was noted that 40% of people ages 55 and older were actively working or looking for work in the year 2014 because of the changing age composition of the labor force. But when you do you can use the money to fund your retirement, your dreams, and live comfortably no matter what life holds for you.

Counterpoints to Selling a Structured Settlement

Bumps in the road will happen through out life but one’s immediate response should not be to handle the unfortunate event by selling a structured settlement for a lump sum.  You will be surprised how often an annuitant will consider this option exclusively before determining if other avenues exist to get cash. While this advice may seem strange coming from a structured settlement buyer, we are cautious to move forward with an individual that has not considered whether the transaction is in her or his best interest- a determination that a court will have to make as well as part of the process.

A few states require that before a person can sell a structured settlement for a lump sum, they must meet with a lawyer or other professional. One state even requires that the company proposing to buy a structured settlement for a lump sum pay for that professional if the customer elects to do so– the California Structured Settlement Act.   Whether or not the law requires it, it is often a good idea to discuss your potential options with close advisers and maybe even elect to hire a professional- that said, if you are competent adult it is ultimately your decision whether to meet with a 3rd party (in states that do not require you meet with IPA or Independent Professional adviser) and whether moving forward with the transaction is in your best interest.

When you call us, we are not in a position to give legal, financial or tax advice regarding the sale of the structured settlement. This is not our role and we are not here to provide you any such direction when you sell structured settlement.  We are on the other side of the transaction.  What we can do is give you fair and reasonable price if you decide to sell a structured settlement. There are a variety ways to account for getting an appropriate size lump sum when you are in the market- one of the best ways is to speak to multiple buyers of annuity payments.  Simply by discussing your position and asking for the best offer to buy a structured settlement (or portion), you will being to learn what is involved and equally as important get a handle on the range you might receive.  You may be surprised how large the range will be and how through a little shopping around how much cash for a structured settlement you can obtain.

Some Thoughts on How to Sell a Structured Settlement

thoughts on selling structured settlement

Lets start with the premise that the entitlement to a structured settlement is a good. Either by injury, inheritance or relations to an injured person, you are entitled to either monthly structured settlement payments or lump sum structured settlement payments. These settlement payments may be due starting immediately or may not become due for many years. (Just the other day we saw a structured settlement in Florida that started paying annual payments in lump form starting in 2035). Maybe your parent set up the structured settlement when you were a minor. In any event, you have this structured settlement, it is worth money, and you are considering:

1. How to Sell a Structured Settlement

2  What a Structured Settlement is Worth.

These are common starting questions from people just looking to evaluate whether it is good or bad for them to sell all or some of a structured settlement. The Who, How, and How much are questions that necessarily follow that initial thought about raising money through a structured settlement transaction. We spend a great deal of time speaking with people in your position- some elect to sell a structured settlement or sell part of a structured settlement to us. Others decide not to sell a structured settlement at all.

Its not our initial focus when you call to decide if getting cash for a structured settlement is the right thing for you. What we want to do is provide you the information about how to sell a structured settlement, maybe provide you a quote if you are interested in getting one, and then let you decide whether you wish to sell a structured settlement to us. The decision of who and how to sell a structured settlement is exceptionally personal and should be done when the time is right. Your best interest controls what is or is not the right time to sell.

The technical part of how to sell a structured settlement (compliance with the law) is something we specialize in and we know you will be completely confident that it is done right and timely when you work with us. There is absolutely zero doubt about that. The only decision for you to make: is the time right to sell my structured settlement, am I being offered the right amount to sell my structured settlement and what structured settlement buyer you feel comfortable with.

Sell My Structured Settlement – Yes or No

Getting the lump sum of any big payout is always tempting. Somehow, it feels more tangible. It also feels like you have more control over your money. But do you really? How do you come out in the best position possible if you choose to cash out? If you are thinking your self tosell my structured settlement, read through the points below:

Structured settlements or Fixed Annuity have been part of the US legal landscape for more than two decades. It’s an annuity or tax-free periodic payout of aggregates of a fixed amount awarded to you for winning a lottery or a legal settlement for cases like personal injury or worker compensation claims.

Pros and Cons of Selling Your Structured Settlement

If you haven’t referred our detailed blog on “Pros and Cons of Selling Life Contingent Structured Settlement Payments“.  If you don’t have the time to read the entire blog we brief about the herewith. There is no hard and fast list of pros and cons of structured settlement that applies to everyone when selling structured settlements. Put together a list of the benefits you’ll get and the losses you’ll take if you decide to sell. Consider these points as you mull over which path to choose:

◉    Count Your Possible Losses

➙ Loss due to taxes.When you take the lump sum from a finance company, you’re liable to pay state and federal taxes that may significantly reduce the actual amount you get. Research the taxes that may be levied in your location.
➙ Loss due to being underpaid.Of course the buying company you’ll sell to would want to make the most profit from any transaction. Expect to be underpaid a lot less than the real value of your structured settlement.

◉   Research Buyers & Financial Companies

Don’t settle for the first company willing to buy your structured settlement. Be wary of low offers. Shop around for the best terms. Inquire at different structured settlement funding companies at the same time. Take your time while you think how to sell my structured settlement payments and do thorough research. There are many resources that can help you, like the Better Business Bureau and your Attorney General’s Office.

➙ Read reviews about the companies or buyers you shortlisted.
➙ Contact other structured settlement owners who cashed in with a buying company and get first-hand information.
➙ Have multiple meetings with your buyer to gauge if this is really someone you can trust.

◉    Sell Only What You Need

If you are leaning strongly towards the selling option, consider not giving up the whole lot of your settlement. Explore options that allow you to sell just a portion for a quick cash payout. Think over how much cash will tide you over then sell only what you’ll need.

◉    Note Possible Contract Restrictions

Read your purchase structured settlements document carefully. Some fixed annuity arrangements are arranged through a contractual agreement. Be very sure that you are not violating any contract terms or condition sunder the settlement.

Issues with Selling Structured Settlements

After you list your pros and cons, it’s also best to know some of the knotty issues surrounding the buy and sell of structured settlements and why utmost care needs to be taken.

Structured settlement is big business in the US. According to theIRS, more than $6 billion is paid each year to new structured settlements and an estimated $100 billion or more has been paid in parts to settlements that are in force today. As a whole, the US government encouraged structured settlements because of their strong benefits to injured parties. Federal tax rules are even designed to encourage the use of structured settlements—structured settlements are excluded from the recipient’s taxable income (Periodic Payment Settlement Tax Act of 1982).

Financiers learned to take advantage of structured settlements.In the early 1990s, a market of individual buyers and financing companies, also referred to as factoring companies, started creating a business around the buying of the rights of settlement recipients to future payments. They used aggressive advertising and enticing terms to get settlement owners to trade their rights for easy cash. Even though settlement rights are non-transferable, factoring companies found a way to circumvent this restriction by asking the settlement owners to redirect their payments to the company addresses.

There are legal rulings to protect structured settlement owners.Because of the shenanigans of these companies, the US government created rulings designed to protect structured settlement recipients. These decrees are enacted in varying degrees in the 47 states.You can find more information on your state’s rulings HERE.

➸ The transfer of structured settlement payment rights is legally ineffective unless it receives advance court approval. This is enforced in 38 states.
➸ Factoring companies must fully disclose the value of the settlement and the discounted amount to be paid in exchange for it.
➸ The IRS imposes a 40% federal excise tax if a transfer of structured settlement payment rights does not receive the required court approval.

Beware of Fraud

Now you know that it’s not always possible to sell a structured settlement under state and federal laws. Also, majority of the states have restrictions for such a sale to take place. Be sure to seek court approval before attempting to do a sale so that you’re sure you’re not violating any laws.

Lastly, beware of fraud. There are a lot of fake companies and persons out there that are just waiting to pounce on unsuspecting victims. Do your research and do business only with reputable finance organizations. If a group or an individual is giving you a too-good-to-be-true offer the nit probably is.

You may want to consider hiring a financial consultant or a lawyer to advise you on the best course of action.

Play It Smart

Selling your structured settlement definitely has its potentials and drawbacks. Be sure you’ve weighed all your options, have done the necessary research, and, if you’re still unsure, have sought credible legal and financial advice. Undoubtedly, it’s a big decision. Your “yay or nay” to selling your structured settlement should only be decided when you’re already well informed and have thoroughly deliberated your choice. Play it smart. Good Luck!!

Sell Structured Settlement in The Right Way

Holiday season is a time when a lot of folks start taking stock in their financials. As part of this, they may be looking to sell structured settlement or get cash for structured settlement. In fact, calls from across the country are coming in on a daily basis to the experts at Catalina Structured Funding. Some potential customers may be looking for a $1,000.00 while others are looking for a $100,000.00. In either case, we make our experts available for free to all those contemplating going forward to sell structured settlement.

A common misconception is that the financial terms relating to the sale of structured settlement payments are not consumer friendly. We here that all the time from those first calling around to get prices to sell structured settlement and often times, from people that have quotes from some of our competitors. What you should not however do is assume you know how much you will get paid if you were to sell structured settlement and take a moment to call us at Catalina Structured Funding, Inc. We think you will be very pleasant surprised about what we can offer you in exchange for a lump sum when selling structured settlements.

When you sell structured settlement payments to us we can guarantee you will get an immediate cash advance on structured settlement sale if you are interested. Some customers like this feature of getting a sizeable cash advances while many others prefer to wait to get the full lump sum at the time of final funding. The choice is really up to you and whether you are interested in getting the cash advance.

You may be concerned that you will have to sell structured settlement in full. Quite the opposite, however, is true. Most customers of Catalina Structured Funding, Inc., that decide to sell a structured settlement, only sell part of their structured settlement. By proceeding with the sale of just part of a structured settlement, our customers procure a lump sum while maintaining, in most cases, the actual schedule they agreed to when they accepted the structured settlement. Structured settlements that pay monthly provide a variety of options when it comes to selling part thereof.  That said, a structured settlement that provides for various lump sum periodic payments in the future is also very convertible to a immediate cash while maintaining some or large portions of the immediate schedule.

Start with the best structured settlement buyers in the nation and give us a call to review proposals. We will be quick, efficient and definitely not include any annoying sales pressure tactics that our customers say they find elsewhere.

How Much You May Give Up If You Sell Structured Settlement Payments

structured settlement money give up

Much is said about how much you may be giving up if you were to sell structured settlement payments for a lump sum. Lets be clear, you definitely “give up” something when you convert a future amount of money for an immediate lump sum. Think about it, someone is giving you money today and by the very nature of the transaction has to wait months if not years for the money to roll in. You can NEVER get a lump sum today for an amount equal to collective face value of the structured payments you are selling.

How is it than that you determine if you are getting a fair and reasonable price for your structured settlement payment due in the future? Any such discussion should start with:

1. Do you really need to sell structured settlement for a lump sum?
2. Have you considered alternative options to cash today that would not involve your sale of structured settlement payment rights.

These two over arching issues, along with several others are a good place to start before you sign any contract or even get quotes to cash out your future annuity payments.

If you have determined that selling your structured settlement payments are the right thing to do, the next step is to evaluate whether or not there is an option beyond the sale of the entire structured settlement. Options may include partial and deferred sales. In order to determine which option is right for you, it is often recommended that you shop around to several annuity buyers to allow them to get you a quote or quotes. This process will not only allow you to see different options but will also allow you start understanding what the market may bear in terms of a purchase price for your structured settlements.

Take note that in most cases, if not all, cashing out a small annuity may be require you to sell all of your structured settlement payments – if you were to elect to sell. Larger annuities, those with greater face value, may provide more varied liquidation options. This may or may not be the case depending on restrictions your annuity issuer puts on the payment stream with respect to selling only part of structured settlement payments.

You need to be an educated shopper and understand the ramifications before you elect to proceed. Calling CSF friendly and knowledgeable staff is a great place to start or finish when looking to sell structured settlement.

Exercising Caution When Selling a Structured Settlement

With an economy in state of flux, it may be tempting time to sell a structured settlement for a lump sum. According to some reports, in September of 2014 unemployment rates dropped in 31 of the United States and estimates have it that the overall unemployment rate has dropped under 6 percent. This may sound like good news overall but if you have lost your job recently or have been unable to find employment for a while, you may be considering converting a portion of your structured settlement for a lump sum. You should proceed down this track with caution and only after you have considered all your options.

You will find various companies that buy structured settlement annuities on the internet and you may have seen commercials for others on your television. Is it a good idea to contact one of these companies and cash out your annuity or part thereof? The short answer is it depends and it depends on a host of factors that you are in the best position to evaluate and decide upon.

In considering with to move forward, it does not really hurt to get a quote from a reliable buyer and then to explore that alternative with trusted advisers if you so chose. It also may be prudent to get options from more than one or more buyers and do so with the idea that different companies may provide you dramatically different offers for the very same payments. This may be based on a host of internal factors regarding the buyers financing or it may be unrelated. In the end though, does it really matter? What you want to go with is a buyer you are comfortable with and that is providing you fair value.

Going back to the unemployment factor, if you are in this position and receiving monthly structured settlement payments you may pause and consider selling something other than your full immediately due annuity payments. While not commonly understood at first, the structured settlement buyer does not have to purchase the full annuity you don’t need to sell structured settlement payments coming due immediately. Instead, if you are relying on that immediate income but still need a lump sum, you may be best off to ask the buyer of structured annuity to provide you with options that purchase some of the deferred/non-immediate portion of the annuity payments.

Sell Part of a Structured Settlement to Get Cash Today

So you have a really good structured settlement, which takes care of you in the future.  And you like that, because you have security in the future. But you are also in a tight spot and need money. Wish there was some kind of middle road? The good news is that there is!

Selling PART of you structured settlement is not only a viable alternative to selling the entire remainder, it is also quite common. The benefits of selling only part of your structured settlement are numerous:

  • You can get cash now for part of your settlement
  • You can keep the security of future payments on parts you do not sell
  • Selling part of your settlement is a more flexible approach to selling your settlement
  • You get to choose what you want to sell and what you want to keep

Selling PART of your settlement is a middle-of-the-road, flexible alternative.  It allows you to get the best of both worlds—cash now and the security of future payments.

Let’s assume for example, that you have $500 monthly payments for the next 20 years; $5,000 annual payments for the next 10 years, and 3 various one-time lump sum payments throughout the next 15 years. You can see how you would have several options at this point. You could sell one or all of your lump sum payments and keep your monthly and annual payments, or you could sell all you monthly payments and only keep the annual and lump sum payments. You can try various different approaches and see what works for you when you sell a structured settlement.

Here are some tips for selling parts of your structured settlement:

  • Do not sell what you think you will really need. For example, if you really rely on your monthly payments, then don’t sell them. Sell your annual or lump sum payments instead!
  • Sell what you think you can do without! For example, if you usually deposit your annual or lump sum payments into your savings account instead of immediately spending them, you can sell them and keep the other payments that you rely on.
  • Think carefully about your financial situation and plan accordingly—tailor the sale to suit your needs (no pun intended).

When it comes to selling parts of your structured settlements, it’s very important to understand what you are selling and how it will impact you in the future. Call our expert customer service representatives today for more information on selling part(s) of your settlement!

Choosing The Right Buyer for Selling Your Structured Settlement

If you are considering selling your structured settlement, chances are that you’ve probably already done a fair deal of research on the topic of converting your structured settlement and structured settlement buyers.  You probably realize how important it is to pick a knowledgeable and experienced buyer of structured settlements that can handle all aspects of the conversion from A-Z. Chances are you’ve also encountered a number of buyers in the market while doing your research. The question now is whom do you go with?

When deciding which buyer to choose, you want to narrow your focus on the most important areas of the conversion process: First, the conversion process can be prolonged and complicated, depending on your state’s legal requirements; you need a buyer with the experience and know-how necessary to effectively close out your conversion. Secondly, as noted, the process may be long, and you likely need money now and can’t wait; you’re also going to need a buyer that offers cash advances and FAST, too. Thirdly, customer service should be one of your main concerns, as this can make or break your relationship with the structured settlements buyer that you’re working with. And finally, the PRICE that you will get for selling your structured settlement payment is also a critical consideration. Here, at CSF, we pride ourselves on beating our larger competitors on several levels and outperforming them every step of the way.

Starting with the first consideration, our experience and knowledge in the industry is unparalleled. Our knowledgeable and professional staff has been involved in the structured settlement industry since its formative stage. We have the legal expertise necessary to ensure successful completion when you sell a structured settlement without any unnecessary delays or problems.

Moving on to cash advances. We are generally able to provide each structured settlement customer with a specific cash advance amount that they qualify for. You can call us today to see how much you qualify for and exactly when this cash advance will be provided. Call us about a structured settlement buy-out and during that very first conversation we will get you the exact amount of the cash advance you qualify for as well as the very best structured settlement lump sum offer you have.  It is how we think a top buyer of structured settlements should operate.

Our commitment to customer service is also unparalleled in today’s market. We look at it as if our reputation as a settlement buyer is at stake with every transaction and therefore treat every customer with a structured settlement annuity as if he or she is our most important customer. We provide first-quality customer service to all our client’s, which includes: free case evaluations, free quotes, free information, free status updates and anything else that is necessary in the process of completing your structured settlement conversion.

Finally, comes one of the most important criterion: PRICE. How much you can get for your structured settlement depends on how much of it you want to sell (full buy-out or partial sale) and whether the payments are guaranteed or life-contingent (we buy both!). Call us today for a free structured settlement quote and a free structured settlement case evaluation over the phone!

Fees Associated Sell Structured Settlement

structured settlement fees

At Catalina Structured Funding, you are NEVER responsible for fees associated with selling a structured settlement. Not only do we provide the MOST cash, we will cover ALL costs that are incurred with respect to cashing out future annuity settlement payments for a lump sum. Its our understanding that other structured settlement buyers may pass along some fees to their customers – which is a shame. One way to figure out if as part of selling structured settlement payments you will be responsible for any costs is to see if the net amount you are quoted for settlement payments is different than the “gross amount” of the lump sum you are told you will receive.

While we do not pass along ANY fees to our customers when converting annuity payments to money now, we frequently get questions from people that are looking at getting a lump sum for structured settlements about what are the fees that are incurred along the way. To that end, here is just a description of some of those costs:

Legal Fees

Every sale of a structured settlement that came about because of a personal injury lawsuit must be approved in court before a judge prior to you receiving a lump sum. In order to accomplish this, the settlement buyer needs to retain counsel and pay that counsel for his or her service.  The costs of doing so is not cheap.

Filing Fees

At the time the petition or application to effectuate the selling of a structured settlement payment is filed in court, the structured settlement buyer must pay a “filing fee”. These filing fees range in costs but generally can be several hundreds of dollars. Each state, and sometimes different counties in the same state, will charge differing amounts at the time of filing.

Administrative Fees

When structured settlement annuity issuers will charge a “administrative fee” prior to acknowledging the selling of a structured settlement payment or payments. These fees can range from zero to several thousands of dollars.  Each annuity issuer charges the structured settlement buyer different amounts

If you are looking to sell structured settlement for a lump sum or just cash out certain structured settlement payments, the team at Catalina Structured Funding can get you the most cash and will pay you the lump sum without taking out any fees.

Give us a call today at 1-800-317-3769 to see how much money we can get you. Whether you are looking for money for immediate payments, deferred payments, or life contingent structured settlement payments, we are the right choice.