Quick Cash for Your Structured Settlement Payments

October 5th, 2008Bankruptcy

by Frank ReCouper Sr.

What are some things that you need to know about before cashing in your structured settlement annuity. A honest structured settlement annuity payment purchaser must be found. Find out how long the company or broker has been in the structured settlement industry. Given the level of difficulty in the industry, the company or broker should have a solid background.

You should also consider checking to see if there are any lawsuits being filed against the company or broker. - contact your local Department of Consumer Affairs.

Talk at length with the company or broker, ask him / her questions and get a feel for how knowledgeable they are. Trust your gut feeling! Steer clear of those who promise much more money or can get it faster than others. If it sounds too good to be true, then it is.

When will I get my money?

If you have been told that you can get your money within a few days ? do not commit! In fact, it may take a month and a half or longer depending on the following:

1. You have to go to court in your state to have the judge approve you selling your payments. If you don’t get a court approval you pay a 40% tax. To get this approval can take up to 4 months.

2. Have you dealt with Insurance Companies some are easy, most not so easy. It takes time to get the paperwork from them.

3. What kind of payments do you have (quarterly, semi, annual, or are they a lump sum)? Different funding companies have their own requirements and it’s critical for your broker to know these requirements. Do your homework on the company or broker you choose - you will get your money faster and with a lot less hassle.

4. Its good to have an A rated Insurance Company holding your annuity. Selling lower rated companies annuity payments, will get paid less money. Investors are looking for the safest investment for their money.

5. Copy of the annuity, the settlement agreement and release, photo ID, recent payment check , application, any child support payments out standing and ect. are what are required. You get the idea of why you need someone who knows what they are doing.

If you add up all the payments and think you are get something close to that figure, your wrong. Why? If you WAIT for your payments, you will get that amount. Your NOT WAITING, someone else is. They want a profit and they have to wait to get their money back, they gave you. $120. paid today is worth $120. $10. a month paid for 12 month is not worth $120. today. Its worth $120. in one year when you get all the payments. This called the time value of money and to many its confusing. Look at other sources for money like family, friends or a bank loan.

You have decided to sell your structured settlement and some questions to ask yourself. What about taxes? As of January 23, 2002 a new law says no tax liability for selling a structured settlement.

Another consideration when selling your structured settlement is selling only a portion. Sell a portion that will meet your current needs, and leave the rest in an annuity so that you will still receive some sort of monthly income. A financial emergency or other unexpected expense may come up requiring you to access and sell a structured settlement.

Just keep in mind that the settlement was meant to be dispersed over time and selling the structured settlement may result in financial problems down the road.

About the Author:

Frank ReCouper Sr. is President of FDR Resources and has been in financial services for over 45 years. For more information about Selling a Structured Settlement or Structured Settlements