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Selling a Structured Settlement

If you have been rewarded a structured settlement and find that the monthly payments do not cover all of your financial needs, you should consider selling your future payments for a lump sum of cash. There are many ways to do this, including selling all or part of your settlement. In this article, I’m going to talk about the process of cashing in a structured settlement.

Selling a Structured SettlementHere are a few things you should know about selling structured settlements:

  • Even though your current contract may include terms that prohibit the settlement from being sold off to a different company or individual, you should still be able to sell. This is because state laws override most contractual restrictions.
  • In most cases, the money which you receive will be completely tax free (just like with regular structured payments).
  • Every sale (or partial sale) has to be approved by court.
  • You don’t have to sell all of your future payments – it’s completely normal to sell half or even just a third of your settlement.
  • Most good companies should be able to sort out all required paperwork and get approval from court without you having to do any work.

The process is rather complex and lengthy, and letting a specialist get everything sorted out and ready is probably a good idea.

Reasons for selling

You are going to need a justifiable reason for selling your settlement. It can be anything from wanting to pay for your kid’s tuition to paying off credit card debt. The most important thing it to use the money which you receive wisely – there’s no reason to sell a guaranteed income stream (such as a structured settlement) if you don’t really need the money. Here are some of the most common reasons for selling:

  • Pay for things like home or car repairs.
  • Pay unexpected medical bills.
  • Pay off a mortgage early to save on interest.
  • Pay off credit cards that are quickly accumulating interest.

Whatever your needs are, make sure that you have a plan to reinvest the money wisely.

When choosing a company to work with, look for someone who is willing to offer you advice on how to get the most money out of your settlement. The whole process can seem very complicated to an outsider, and there are business that take advantage of this and always make ridiculously low offers.