How To Find A Reliable Buyer For Your Structured Settlement

by Hank Coleman

Choose a structured settlement wiselyA structured settlement agreement can never be altered once it has been made, preventing you from getting a lump sum amount when required during an emergency. But the law does allow you to transfer the rights of receiving the annuity to a third person if you wish to do so; or in short, the law does not deny selling of the structured settlement and obtaining money for it.

So whether it’s a medical emergency, an opportunity to buy a high value real estate or for even funding college education, you can sell the structured settlement and obtain the appropriate money for it. Obviously here the question rises of where to sell the settlement and to whom. This article outlines everything you need to know about finding a buyer for your structured settlement, how they operate, what are the costs involved and the legal formalities involved.

The definition Of A Structured Settlement Reliable Buyer

In order to prevent the recipient of a settlement squandering money and again ending up in financial trouble, the periodic payment settlement act was established in 1982, which presented the option for defendants to pay the agreed settlement in the form of annuities. Though this was a boon in one way, it was quite restricting for the recipients as the economic condition was ever changing. To help people out in such cases, few financial companies started buying the structured settlement and paid the lump sum amount to the recipient in return.

But during the 90’s the business took off so well, that a lot of them started to make unreasonable profits out of it by charging extra fees and undervaluing the original settlement amount. Hence the reliability of the buyers became questionable and the government had to intervene to make the process more transparent.

So now every buyer has to file a case with the court and get the approval of the court before he can gain right to the settlement and pay you the money. So no matter which company you approach the process is pretty much the same, and the ones who convince you that they can provide the money without the settlement are straight forward scammers.

Ultimate Checklist for Your Finances

Take back control of your finances!

Get a FREE checklist for the money moves to make in the New Year.

Also get new articles, advice, and tips delivered right in your email inbox with our newsletter!

Though the courts verify every single process involved, it does not actually imply any restrictions on the fees that ought to be charged. So a reliable buyer can be defined as someone who has a longstanding reputation in the business, and someone who can provide you the right deal for your settlement by charging the lowest fee possible.

Operation Procedure Of Structured Settlement Buyers

Just like banks, insurance corporations, the structured settlement companies are also financial organizations looking to make profit by means of buying your asset that is the structured settlement. So you can’t expect them to offer too much discounts on the fees they charge, but any company that offers a low cost service that comprises everything from documentation to attorney representation, compared to the other firms is a good place to begin with. But remember; never sacrifice transparency or the services offered for a lower quote.

The operating procedure of the structured settlement companies is quite simple. The first part involves the valuation of the total structured settlement by the company, which will inform you of the money that can be paid in return for it. After the valuation is done and you have agreed to their terms and conditions and the money they are willing to offer, the documentation part of the procedure begins.

The firm will send you the contract and the disclosure agreement which will contain all the details of the settlement and the information relating to the transfer of rights to the company. You will have to go through the agreement and sign it after discussing it with your attorney or your financial advisor. The contract will then be submitted to the court, which will summon you in a few days for hearing the plea.

If the judge is convinced that your request for selling the structured settlement is reasonable; on his approval the money will be instantly transferred to you. Of course the charges and fees incurred during the whole process will be deducted from the total amount to be paid to you.

Zeroing In On A Truly Reliable Buyer

Now that the operating procedure is clear, the picture of a reliable buyer should have become quite apparent. Mart Hackney from (company name) shares some tips that can prove to be helpful for you in zeroing in on the best buyer. So essentially,

  • Choose a buyer who has been operating in the business for years and has a good reputation. Usually, when it comes to financial institutions, the number of trouble free years they have operated corresponds directly to their reliability,
  • Select the buyer who has consistently offered transparency in every step of the procedure.
  • Buyers who offer all services in one single package and let only the signing part up to you can actually save you a lot of time and money.
  • Select a buyer who provides an accurate total value of your structured settlement beforehand.
  • And finally opt for the buyer who will charge you only a reasonable amount as fee as compared to others.

Structured settlement buyers also provide you the option to only purchase a part of the settlement and offer you a lump sum amount for it in return. This option can come in handy when you need to only take a part of the money out. But no matter how much you wish to withdraw, the same procedures apply, and you should check at every step that the firm confirms to it.

myFICO Score Watch Trial

About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 592 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


Subscribe To Money Q&A

If you want to learn more about taking back control of your money please subscribe to Money Q&A’s RSS feed or via email to receive all the latest articles! You can also subscribe to our Free Weekly Newsletter.

{ 2 comments… read them below or add one }

John C @ Action Economics

I didn’t know that the structured settlement buyers would be willing to buy only a portion of a settlement, that is certainly an interesting concept. I wonder what discount rates they use to calculate the present value of future cash flows.

Reply

Sam Walters

John C,

Luckily for the structured settlement owner, they can sell a portion or even a single lump sum to a buyer (lump sum company). This gives the annuitant some flexibility when making decisions on personal finances. Before getting a quote, I think its a good idea to get a second opinion when selling either lottery payments or structured settlement payments to a buyer. I believe the discount rate is calculated the exact same why in terms of future valuations just less years involved.

Reply

Leave a Comment


Previous post:

Next post: