For many people, structured settlement payments provide a level of security through the regular income they provide. Settlement recipients may depend upon this income for a number of different reasons, but there may come a time when a large cash sum would be more useful. While selling may not be the best idea for everyone, those who have decided to do so will be faced with a number of decisions before, during, and after the process.
Structured Settlement Annuities
When a civil lawsuit is settled, the plaintiff may choose to have his award in the form of a structured settlement that is paid in increments over time. These settlements are most commonly the result of workers’ compensation, medical malpractice, personal injury, and other similar suits and they may be a life-saver for the injured individual.
The annuity is typically established through and maintained by a life insurance company. Instead of simply keeping the entire sum that was awarded at the time of the decision, an annuity allows for the injured party to have a secure, continuous stream of income for a designated period of time, usually many years or even decades. Most people with structured settlement annuities receive monthly payments, but some are paid quarterly or annually.
Selling an Annuity
While the steady stream of income from the structured settlement has a number of benefits, the owner of the annuity may at some point decide that she is better off with one lump sum of money. There could be any number of reasons for this decisions, but many times it is because of an emergency or other unexpected expense that cannot be helped. Some common examples of such cases include expensive medical treatment or emergency home repairs, but there could be hundreds of instances in which money is needed in an emergency.
However, not every case for which a settlement holder would desire to sell involves an emergency. Some sellers simply wish to invest the money on their own or pay off substantial credit card debt. Others sell in order to buy a house or pay for a college education. Whatever the reason, the option to sell is up available to any individual who receives structured settlement payments, as long as their state allows it.
The Process
You will need to weigh your options carefully and probably seek advice for your settlement, but if you have decided to sell, you will want to know what to expect from the process. The entire process can take between two to three months, so you should not expect anything quickly.
The first step is choosing a buyer. There are hundreds of options available, some of which will make fairer offers than others, but just make sure you go to a reputable source with at least an average rating with Consumer Affairs. Once you choose the right company and select a quote, the company will send you some legal paperwork to sign.
Next, you will have a court date in which a judge will ensure that the sale is fair and that you are aware of what you are doing. Unless the seller is clearly being taken advantage of, or there is some miscommunication or legal holdup, the sale is approved in the vast majority of cases. After this, you simply have to sign some more paperwork, collect your check, and head to the bank.
