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Archive for the ‘Cash Structured Settlements’ Category

Do You Have to Sell All Of Your Structured Settlement Payments?

When Structured Settlements Are Not Enough

Personal injury victims receiving structured settlement payments are painfully aware of how unpredictable and unfair life can be.

You can never tell when disaster may strike and put you in a financial situation that cannot wait for periodic payments. It is during such times that many opt to sell structured settlements for a lump sum of cash.

Selling Structured Settlements: The Partial Lump Sum Option

The flexibility of a lump sum gives people the power to spend when they need it. Many of those who have decided to sell structured settlements assume that they are obligated to sell all of their payments and are surprised that they don’t have to. As a matter of fact, most lump sum transactions only involve a fraction of the payment stream.

This is actually the best option for any seller: a partial lump sum transaction to cover a current financial emergency without sacrificing the security of periodic payments.

Beware Structured Settlement Buyers Who Keep You in the Dark

There are some structured settlement buyers who take advantage of sellers who are ignorant of this fact. Now that you know, be wary of companies who do not bother informing you of your this option.

Everyone’s financial situation is unique, so take your time deciding how much money you require for your present need – because the decision may affect your future security.

Selling Your Settlement? Know What Yours Is Worth!

Even When Not Yet Selling Your Settlement,
Get Quotes from Structured Settlement Buyers

Most structured settlement recipients do not foresee a need to sell their payments in the secondary market for structured settlements. However, knowing the value of your structured settlement payments may come in handy later on should a financial emergency force you to sell structured settlement payments.

 Know What Your Structured Settlement Is Worth

To know your structured settlement’s worth, contact a number of structured settlement buyers and ask them how much they’d offer should you decide to sell. Before calling, prepare your documentation – including a copy of the settlement agreement and the annuity policy. The purchasing company can quote you their offer much quicker if you immediately provide them the information in these documents.

Ask How Much Portions of Your Settlement Are Worth

When asking for a quote, don’t just ask them for the value of the entire settlement you want to sell. Inquire how much portions of the annuity payments are worth, so you will have a good idea of the kind of flexibility you might have in customizing the transaction to fit whatever needs you may have in the future.

Sell Structured Settlements In This Economy

Sell Your Structured Settlement
If Your facing Financial Hardship In This Economy

Structured settlements are financial agreements that allow compensation to be paid through an annuity in scheduled payments, for either a fixed period of time or for the life of the plaintiff. Since it is suitable for individual claimants, the structured settlement may also include an upfront payment to cover any contingency.

In many cases, a structured settlement is the best way to cater to a plaintiff’s needs. For example: catastrophic injuries and wrongful death lawsuits that include replacing the lost income of the deceased; Permanent or long term disabilities; and workers’ compensation cases.

However, there are some instances in which structured settlements are not suitable. An award for a minor injury sustained in an accident would probably not necessitate the use of a structured settlement. In situations where extended hospitalization or long term treatment is not needed, a lump sum award may be sufficient to provide for the needs of the damaged party.

Why Many People Choose To Sell Structured Settlement Payments

Once a structured settlement agreement is reached, the terms are fixed, and there is no allowance made for unexpected financial emergencies. This is why many people choose to sell structured settlement payments for cash. Life situations change and people may want to buy a new home, start a business, return to school or train for a new career. A lump sum of cash offers more flexibility and greater control over the money than a structured settlement.

Perhaps the most persuasive argument for selling structured settlement payments is inflation. In an economy where the value of the dollar decreases over the passage of time, it may be wiser to get the lump sum now before inflation erodes the value of a settlement. A lump sum of cash properly invested today could be worth more than the future value of a structured settlement.

You Can Choose All or A Fraction
When Selling Structured Settlement Payments!

When selling your structured settlement payments, you can choose to cash in all or just a fraction of your future payments. This option offers immediate cash without having to sacrifice the long term security of a structured settlement. If you decide to sell structured settlements, make sure to sell the amount necessary to meet your financial need.

Lastly, carefully choose a buyer that gives the most cash for structured settlement payments, a buyer who has been in business for at least several years. Check out potential buyers with the Better Business Bureau, and do some research to determine if past customers have been pleased with the company’s services. By doing your research now, you ensure that you will not come to regret selling your structured settlement later.

Should You Cash Out Your Structured Settlement For a Lump Sum?

Why Should I Cash Out My Structured Settlement For A Lump Sum Payment?

More often than not, when people are awarded compensation for accidental injury or wrongful death from their insurance companies, they choose to receive a series of payments over a longer span of time instead of an immediate lump sum of cash. These structured settlement payments usually total more than the amount one would have received at settlement. In order to opt for a settlement structured in this manner, the plaintiff must sign a settlement and release agreement that permits the defendant to buy an annuity policy to provide for the payments to the annuitant. The annuitant does not own the annuity nor does he have the right to sell it. He does have the right though to sell structured settlement payments to a third party.

Is a Lump Sum Payment Necessary For You?

The specific reasons plaintiffs have for selling structured settlement payments may vary but it all boils down to some kind of change in their financial situation. During the time the structured settlement was made, the scheme fitted the annuitant’s needs. Over time, financial hardships may strike or investing opportunities may come knocking that necessitate the possession of a large sum of cash now instead of staggered payments.

Using a Pre-Structured Settlement Loan As an Investment Tool

How You Can Use a Pre-Structured Settlement Loan As an Investment Tool

injury lawsuit may take such a long time to settle, plaintiffs with plans to invest might want to apply for a pre-structured settlement loan before investment opportunities pass them by

A Pre-Structured Settlement is Not Only For Hardships

Plaintiffs often think that a pre-structured settlement loan is only for those who are facing financial hardships; they are mistaken. It is possible for any plaintiff to use a lawsuit loan during his pending lawsuit as an investment tool. The plaintiff can use the money in various ways; however, like all other types of investment, there are risks involved. The plaintiff has the benefit of not being required to pay back the settlement loan in the even that he loses his lawsuit. So, even if he loses both his case and his investment, he would still break even in the end. However, if the plaintiff wins his case but loses his investment, he is out the original investment amount. With so much at stake, plaintiffs must understand all the risks before applying for a lawsuit settlement loan, as an investment.

Cash from The Settlement Can Be Invested in Whatever You Desire

The cash from a lawsuit settlement loan can be invested in any endeavor the plaintiff can think of. During the 2008-2009 housing market collapse, houses cost 30-40% less than they used to in 2006. Some plaintiffs took advantage of this and purchased homes, putting a large down payment or even pay in full. Since a lawsuit could take years to settle, by the time the plaintiff actually receives the money from his settlement, housing prices might have started to rise again making the plaintiff wish had applied for the loan when the opportunity presented itself. While housing prices are still low, plaintiffs planning to buy a house might want to take the calculated risk of getting a pre-structured settlement loan.Plaintiffs have also begun using settlement loans to get into the stock market. Of course, there is always the risk of losing money, however if they turn a profit, not only do plaintiffs recover their original investment, they can even cover the interest and fees attached to their settlement loan and have some money left over. This maneuver though may be best left to those who have a firm grasp on the stock market.

Start a Business with Your Cash

Plaintiffs can also use a lawsuit settlement loan to start a new business, it’s an excellent way to get the start-up cash they would need and prevent them from having to find investors or take out a traditional loan; remember, the money from a settlement loan is yours and you’re not actually borrowing money, you’re just getting your money advanced to you via a settlement loan in return for interest on the advanced amount.

The Good and Bad Of Selling a Structured Settlement For a Lump Sum

 Structured Settlements for a Lump Sum; The Pro’s and Con’s

The option to sell structured settlements for cash must not be taken lightly. These periodic payments could be funds you have become dependent on to some extent, and selling will stop those payments. But if you need a large amount of cash to fund an investment that will change your life for the better, selling all or part of your structured settlement may be more useful to you than hanging on to the periodic payments.

So before selling a structured settlement, weigh the transaction’s pros against its cons first to make sure that what you’re losing is expendable when compared to what you’re gaining.

Pros:

•    Liquidity. A structured settlement limits the liquidity of the settlement money that you are entitled to, whereas cashing in a portion or all of a structured settlement frees that money for immediate use.

•    Value. You can capture the current value of the money that you’re owed. Because structured settlement payments are equal each month, the effects of inflation decrease the real value of your money over time.

•    You don’t have to wait for credit approval. Although you may need to validate your reasoning for cashing a structured settlement, you can’t be denied your settlement because of a bad reference or credit history.

•    Relatively quick payment. Compared to applying for a loan, structured settlement factoring is a faster way to get cash, taking as little as three weeks.

Cons:

•    Structured settlements and annuities are sold at a discount, which means that the lump sum you get through the sale is less than what you would have received had you continued to accept periodic payments.

•    Low regulatory involvement. Structured settlement buyers belong to an industry that is currently unregulated. Unscrupulous companies and individuals exploit this fact by engaging in unethical business practices.

•    Taxes. You’ll be charged an excise tax that can be as high as 40% if you choose to cash a settlement for an invalid reason. You will also incur liability for state and federal taxes on your lump sum.

•    Legal aspects. Structured settlement factoring is a long process that has exhausted many people who have tried it. There is a lot of red tape to pass through before the money will be seen, and some settlements legally cannot be sold.

Tips on How to Get Out of Debt

In Debt? Here’s Some Tips on How To Eliminate Your Debt

When trying to get out of debt, there are so many quick fixes that may seem to work at first but will sooner or later degenerate into a new and even worse problem.

Dos and Don’ts When Struggling to Get Out of Debt.

•    Avoid the temptation to apply for payday advance loans as long as you have other options. It is a quick fix that can turn into a problem even worse than the one you were trying to solve in the first place. Exhaust all other options first: family, friends, home equity, Debtors Anonymous, etc.

•    Splurging and getting into debt can be a self-destructive habit just like alcoholism or any other addiction. Seek professional help if you think you may have a problem.

•    Do not cancel all your credit cards because this will shorten the length of your reported credit history and make you seem less credit-worthy. It is normally best to keep older cards and get rid of newer ones. However, still take your different rates into account before you finalize any cancellation decisions.

 More Tips to Stay Out Of Debt

•    Beware of low-interest balance transfer credit cards. Their default rate will usually get you into more debt.

•    It is best to pay off cards and the balance owed in full. If you pay less than 100% than what you owe, that account will reflect negatively on your credit report.

•    Refrain from giving too much personal information to collection agencies or you might end up saying something self-incriminating that will be put on record.

•    If you decide to go to debt settlement companies, select one that is a registered member of the Better Business Bureau (BBB) and that have a history of little or zero complaints.

Court Approval in Selling Structured Settlements, Why is it Important?

A Court Approval for your Structured Settlement is Important

When you decide to sell a structured settlement to get a lump sum now for whatever reason, you will have to obtain court approval as dictated by law. The judge will look at the proposed transaction to make sure that you are going to benefit from the sale and will also try to determine the impact it has on anyone who is dependent on you. This may seem like the court does not trust you to have enough sense to handle your own finances, but it’s actually for your own protection.

Companies and Court Approvals

There are plenty of unscrupulous companies out there who aren’t always above board when trying to buy structured settlements. When you decide to deal with a sound company with years of experience though, your time in court will be short.

An honest and reliable structured settlement company should be right there with you in court at all times and will do whatever is necessary when the court requires changes to the terms of the agreement. So in this case, going to court is a good thing all around.

It will get the money you need into your hands much quicker than would be possible under your original settlement terms.

Selling a Structured Settlement Annuity

What you need to know before selling a Structured Settlement Annuity


When selling a structured annuity settlement there are many questions which begin to arise. Before you decide to sell structured settlements, think about what you want/need the money forIf it is an immediate medical expense, buying a home or the decision to go back to school is usually considered good reasons. Examine your needs and the needs of your family as well. Perhaps you want a new home. Do you have children approaching college age? If so, you’ll not only incur significant tuition expenses, you’ll also have less of a need for a larger home.

Selling your payments will result in a loss from the full amount. Consider whether or not it is important for you to sacrifice the security and future total amount before you make a decision. You will have to understand the implications, benefits and pitfalls so you can feel comfortable making an informed decision.

“Will I get the full amount from my structured settlement annuity that I would receive over a period of time?”

No. The amount you would receive over a period of time is calculated by adding interest to the principal amount. Instead, you may receive the present-day value of the amount. This present-day value may have to be further discounted to cover the costs to do the deal. The rest will be sent to you in one lump sum. You might want to shop around to find out where you can get the best deal.

Is Money Received From A Structured Settlement Transfer Tax Free?

When your receiving money from a structured settlement transfer, is it tax and interest free?

The lump sum you receive from a structured settlement buyer will have the same tax treatment as your structured settlement annuity. In other words, if your structured settlement payments were tax free then the lump sum you would receive from the sale would be tax free as well.

Most structured settlement annuities qualify for tax free treatment under section 130 of the Internal Revenue Code.

The U.S Government has taken several steps to protect tort victims and other parties from unfair taxes that resulted from personal injury settlements.

Section 104(a)(2) of the Internal Revenue Code states that damages (money) received from personal injury settlements and sickness should not be considered as income and therefore should not be subject to tax.

Tax Free Structured Settlements

The U.S. Government passed Section 5891 of the Internal Revenue Code in 2002 which protects annuitants in the sale of their structured settlement payments. Section 5891 requires that the sale of structured settlement payments be approved by a judge in accordance to the state legislation and statute. This model act was created to make sure that every structured settlement transfer is in the best interest of the annuitant and dependents of the annuitant. The money received from the transfer of structured settlement payments is tax free 99% of the time. If your current structured settlement is tax free, and you sold the rights to those payments, the lump sum you would receive would be tax free.

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