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How To Sell Your Structured Settlement Payments

Structured settlements payments are a good source of regular income. However, if you want a lump sum of money within a short time, selling them could be a good option.

Structured settlement purchasing companies or factoring companies usually buy the settlement payments and give the sellers a lump sum of money depending on how much of their payments they sell, and the period they sell them.

Depending on how much money you need and the amount of your structured settlement payment, you can choose to sell a portion or all of your payments.

However, you need to understand that while you will get a lump sum of money at once, the value will be less than what you would have received from the structured settlement payments. The value goes down to about 60-80%, so you have to evaluate your options carefully.

That is because the company incurs legal and administrative costs, and it has to make profits. If you decide to sell your structured settlement payments, we suggest you review this step by step guide.

Evaluate Your Needs

Determine your needs and why you need the money, then determine how much of the structured settlement payments you still want to receive.

If you want to sell a portion of the settlement payments, you can choose to sell the entire payments for a certain period, which means you will not receive any payment for that period.

Alternatively, if you still want to have a regular income stream, you can sell part of the payments for a certain period and keep receiving the other half. The percentage of payments you decide to sell and the period depends on how much money you need.

Research And Compare Companies

An online search is the best way to identify some factoring companies. Compare their offers, terms, financial stability, and customer service. Ensure that the company you choose is licensed and offers you an amount upfront.

You should also ask them how long they have been in business, how long the process will take, and standard discount rates. Finally, look at their online reviews and check their ratings on the Better Business Bureau.

Get quotes from the companies to see how much each of them is willing to pay for your payments. You should also ask if you need to pay any additional commissions and fees.

If you are not familiar with everything you should look for, ask for advice from someone who has dealt with offering companies before or an expert. If possible, visit the companies and ask more questions if you need clarification.

Select The Company And Complete The Paperwork

Once you are satisfied with the company you want to work with, you need to complete a set of paperwork like a contract and documents transferring ownership of your payments to the offering company.

Besides the contract you sign with the company, you also need to give them a copy of the original structure settlement contract. If you do not have the contract, request a copy of your insurance policy from the insurance company that issues your checks. You can also contact the lawyer who negotiated the settlement.

Other documents that you will need to give the offering company include:

  • Completed application
  • Two identification forms
  • Release agreement
  • Copy of annuity policy

Once you have completed the paperwork, you are in contract to sell your payments to the offering company.

Get Court Approval

The factoring company will prepare all the paperwork and makes all the arrangements for you to go before a judge. The judge requires you to answer questions to verify that you are selling your settlements for your best interest.

Before approving the transaction, the judge will consider the support and welfare of your dependents. After approval, you must send a copy of the court order to your structured settlement administrator.

Request An Advance

It takes time for the transferring process to be complete, and that might inconvenience you if you need the money urgently. Sometimes it takes up to three months before you can get your lump sum of money.

For that, you can ask the factoring company to give you an advance of your payment to pay for your needs, for example, a medical bill or loan.

Get Your Money

After all the processes are complete, you will receive your agreed payment per your agreement with the factoring company. In some countries, you might need a third party to assess the sale professionally.

In other countries, you will have a cooling period where you can change your mind and withdraw from the contract. Therefore, you need to check with your financial advisor or lawyer about any special laws before finalizing the agreement.