Sell My Structured Settlement For Cash

Sell My Structured Settlement For Cash

What is a Structured Settlement?

Should I sell my Structured Settlement for cash?

Cash I Sell My Structured Settlement?

You can sell your structured settlement for cash!

Although structured settlements have been in common usage across the United States for almost forty years as a method of settling primarily personal injury cases, and they are now a normal product of the financial and insurance industry, people are still mystified about them, and often complain that they don’t know much about their checks that arrive each month thanks to them.
Indeed, with all the legalese and the fine print on the structured settlement agreement contract itself, it’s easy to see why plaintiffs throw up their hands when trying to understand the actual terms of their court awards.
How do structured settlements work? What are they for?
The first ‘structured settlement’, well before this now common method of settling claims became known by that name, was the creative solution hit upon by attorneys for plaintiffs and the defendant in the now famous cases in which claimants sued the Canadian manufacturer of the fertility drug Thalidomide. When it was proven that the drug was causing babies to be born with often horrible deformities, thousands of mothers and medical practitioners brought separate injury suits “for grievous harm” against the manufacturer ; so many suits in fact that there was simply no way the defendant could pay out all the damages without going under. Lawyers for the defense and for the prosecution came to a compromise method of payment, whereby each plaintiff would receive their court awarded amount, but they would be paid in periodic payments rather than in lump sums. That way the company could honor their debt more easily, and the many plaintiffs would still receive be paid their full amounts over time. It was an equitable solution in honoring court decisions, and it was an agreeable situation for both sides in these cases.
Structured settlements became so commonplace in in financial and insurance companies that they became the ‘preferred’ method of paying out damage awards, whether or not defendants would have suffered undue hardship from paying out awards as lump sums. They were easy products for the insurance companies to arrange, and they made it easier in the payment of claimants.
Structured Settlements have come into such universal usage today that many plaintiffs have no choice but settling their cases this way. People often would have benefitted from receive a lump sum cash award up front at the beginning, while still others are fine with the structured settlement for years, until catastrophe strikes and they need a large sum of cash. Such need arises from general change in their life that requires a large investment, such putting a down payment on a house, putting a child now of age through college, or maybe they would benefit from an cash infusion to get away on vacation, do renovations on the house.
Nowadays, they can sell the structured settlement for a lump sum of cash and receive the amount less the discount for services rendered by a structured settlement broker and any of number of companies who are willing to buy the revenue streams, and payout their award to the plaintiff in a lump sum of cash. The procedure is quite legal, and the courts watch such transactions very closely to see that sellers are not being gouged.
Keeping a structured settlement has definite advantages. Under Internal Revenue Code (IRC) 104(a)(2), payments made to plaintiffs are not considered ‘income’, and therefor they are excluded from tax. It is ‘free money’. The IRC protection ceases when and if the structured settlement is sold to a broker or to a buyer. If the original award was made as a lump sum, and then made investments using the their award, any interest earned would be subject to taxation. There is good reason to leave the the structured settlement as is, to protect its tax exemption.
Keeping the Structured Settlements arrangement protect plaintiffs from the potential of predatory fraud and the loss in full value when they sell their payment stream to a structured settlement purchasing company or a broker.
Annuities which are the product of the structured settlement are generally offer security to plaintiffs, since the financially secure life insurance companies offer a guarantee that there will always be funds available to be used in paying out the full life cycle of the periodic payments. Insurance companies holding the structured settlement annuity provides great comfort to the plaintiff in personal injury cases should the defendant not be able to meet their payment obligation down the road may, or they die, or the company may run into financial difficulties and seek bankruptcy protection close its doors.
What should I do?
It’s worthwhile, when considering whether to sell a structured settlement, to take inflationary and deflationary trends into consideration. Both fluctuations in the dollar’s real value can effect your decision. A structured settlement annuity is subject to the same vicissitudes of the floating currency value, and the current cycle of inflation may influence ones decision as to whether it’s more financially advantageous to request a lump sum at the time of an award or whether the structured settlement would be beneficial over time.
If you are still among many scratching their heads about taking your award as a lump sum, or if you have already begun receiving payments from a structured settlement, it is good to bone up on the subject . The best way to start is to review your document of agreement and then talk to a lawyer who is familiar with the structured settlement industry.
Change happens! Become informed about your structured settlement so you can better plan for change and not become the victim of it. If you need a structured settlement or annuity quote contact us today.