Selling a structured settlement is not difficult but does require some research and thought on the part of the seller before committing to the structured selling process. First, we must define a structured settlement. A structured settlement is a legal contract between two parties to compensate one party in the contract a set sum of money paid out in installments over a given period of time. Usually these contracts are formed and agreed upon between the party that is being compensated and insurance companies or other entities that are required to make the payments.
Selling a structured settlement to an investor or company that specializes in buying notes, or paper, is an option for people that have been awarded structured settlements. In some cases, people that have structured settlements may experience financial difficulty or health issues that require them to liquidate their structured settlement quickly. Loss of a job or other income streams may be lost, prompting these people to sell their structured settlement. Sudden illnesses such as cancer or heart attack may cause long term disability and immediate cash is needed to meet monthly expenses as well as medical bills.
There are other reasons to sell a structured settlement although not as dire as the above reasons. Some people sell their structured settlements to free up cash to take a long dreamed of vacation. Others sell their structured settlements for home improvements or to buy the dream house they have always wanted. The reasons vary with some selling their notes to put their children through college or taking the lump sum cash investing it in other financial instruments to increase their return over time.
It should be noted that when selling a structured settlement, the total amount of the settlement will not be realized. Structured settlement buyers offer to buy these notes at a discount in return for lump sum cash to the payee. The settlement buyer is assuming risk in buying the note with the discount reflecting the amount of risk the buyer must assume. Many risk factors must be considered by the settlement buyer including the amount of the settlement and the financial worthiness of the payer. Companies that make structured settlement payments are not immune to insolvency and bankruptcy, so the buyer must consider these factors before purchasing a structured settlement.
Deciding Between Multiple Structured Settlement Companies
Before we move on to the tips that will help choose one of the structured settlement companies to buy your payments, are you really sure what you’ve got on your hands is a structured settlement? When litigating procedures come to an absolute end, the winning and losing party may come to a compromise over the payment method for the settlement. Some individuals prefer to pay or receive a structured settlement. A structured settlement is paid in installments over a definite period of time.
- The role of a structured settlement Company: A good structured settlement company must be able to assist you from the moment you have agreed to receive a structured settlement from the losing party to the very day the last payment is made. A good company will also ensure that you are being treated fairly throughout the procedure.
- Years in the industry: How long has the company been in practice? How many cases or individuals have it helped procure the best settlements for their needs? Can they furnish you with any references?
- Fairness: If you’ve agreed to have a structured settlement, contact a company that specializes in such payment methods to help you through with the succeeding steps. The first task it faces is ensuring that the terms and conditions of the settlement are fair to you. Is the amount of monthly or annual payments fair? Are the interestrates too low?
To determine the capabilities of any company in this aspect, ask its representative to give you several proposals that it considers fair to both sides. The right company always comes up with the best and most practical solutions. While its able to empathize with what you are going through, especially if your loved one or the defendant had been seriously hurt, it will not let emotion cloud its judgment; it will not your emotions cloud your judgment as well. The right company will not be afraid to propose practical solutions to your dilemma and the following companies are the only option to this:
- DRB Capital
- JG Wentworth
- Olive Branch Funding
If your loved one has only less than a year to live, a good company will insist on the minimum number of periodic payments. Such a method will allow you to make the most use of the settlement in providing comfort for your loved one in his remaining days. What’s more, it will prevent the insurance company from getting the better part of the bargain!