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Get Cash for Structured Settlements

By Edited Oct 10, 2015 1 1

Structured settlements can provide you with a stable income over a long period of time. But what if you find yourself in a situation where you need a large sum of money? If you have been awarded a structured settlement, but need access to more funds, the answer may lie in third party finance companies that pay cash for structured settlements. Before you jump in and try to cash in your structured settlement, there are a number of important considerations to take into account.

What is a Structured Settlement?
When you win a large sum of money from a state lottery or another contest, a court order, or even a larger insurance payout it is often delivered in the form of payments over time rather than a lump sum. These payments over time, or structured settlements, provide you with a steady income until the amount of the award has been paid to you. Depending on the terms of the structured settlement, payments can be made monthly, quarterly or annually and you may be receiving them for months or years until the amount owed to you has been paid. Sometimes, this arrangement is not ideal if your circumstances change or you have an emergency or life altering event that requires you to come up with a large amount of money.

Getting Cash for Structured Settlements
Getting a lump sum of cash for your settlement can be done through a settlement purchasing company. These companies exist to purchase your settlement and to provide you with the cash you need. They often advertise heavily on television and in print. These companies make money over time by offering you less than the amount of your judgment or award.

The cash you receive for your settlement can be used for any purpose you see fit, but there are a few drawbacks to selling your structured settlement, however. There are tax consequences and other fees associated with the sale of a structured settlement. You will no longer be entitled to receive periodic payments and will instead have to settle for an amount which could be significantly less. Consulting an accountant regarding the tax implications of the sale is a good idea and a lawyer is an absolute must. Hiring professionals and tax obligations will further reduce the amount you ultimately receive.

Legalities of Getting Cash for Structured Settlements
Selling a structured settlement is not as easy or as fast as the advertisements of potential buyers and finance companies would have you believe. Most states will not permit the transfer of a structured settlement unless it has been verified and approved through the court. This is to protect structured settlement recipients from being taken advantage of or falling victim to outright fraud. It is important and may even be mandatory to get the help of an attorney before moving forward with selling your structured settlement.

For those who are receiving regular payments from a structured settlement, receiving a lump sum cash payout may seem like an attractive option. If you are considering selling your structured settlement, it is important to do your research on the companies you are considering doing business with and speak with an attorney before taking further action.



Jun 13, 2010 3:18pm
Lump sum settlement can be beneficial but watch out for the tax implications!! Nicely written article!
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