Is selling my structured settlement the right thing to do?
The bottom line is, you and only you can truly answer this question. Many people out there prefer the security which comes with knowing they always have a monthly check coming. Then there are others who believe they would be far better off getting a cash payment to buy a house or invest in a business or their education so they can get a better job or a promotion with their current company.
What you want most right know is probably peace of mind and security. You may have been reading so many blog posts, looking at loans, evaluating your credit, reviewing your credit card statements, along with the balances of your savings and checking accounts. It can be downright stressful. Sometimes it can feel that your only way through the stress you are in is if you won the lottery.
You have to consider what you want the most and what is best for you and your family both short-term and long-term. Don’t just sell structured settlement payment annuities for the sake of it, though. You should always make sure you have a plan for the money and stick with that plan. If you have your policy handy, it is best to know your structured settlement annuity rates before making calls as that is necessary information to figure the offer on your annuity.
How much does it cost to sell my structured settlement?
In regards to “cost” there isn’t any out of pocket expenses you will incur, and if a company says that they need a “good faith payment” to get you the best deal, hang up immediately. There are no fees that you need to pay upfront. The government is even clear on that. Instead, the fees are deducted from the amount you will receive as a cash payment.
All fees must be fully disclosed in the transaction documents before they are processed. This is law. Always know all the costs before agreeing to sell. Always.
The real cost you will incur of selling your structured settlement lies in the discounted rate which companies buy future annuity payments for. You should go into this process knowing that all structured settlement companies are in the business to make a profit, and no one is just going to “do you a favor” out of the goodness of their heart. The right company for you is one that will make you a fair market value offer that’s right for you and also good for them. A “win-win” so to speak. Realistically, you can expect to lose as much as a third off the total remaining value of your policy, which includes discounted rates, deductions, fees, etc.
What Are Some Good Reasons For Selling a Structured Settlement?
There is far more in this process than just deciding to sell to get it done. You have to have a good reason or cause for selling. A valid reason? Yes, you read that right. You see, your settlement is intended for you to care for your health and the financial stability of your family. It was done in payments so the full amount would not be squandered. This is why a judge will rule whether or not you can sell. It is all for your protection and the protection of your family.
“I can make more money investing my settlement funds by investing myself.”
Does this sound like you? Are you one of those people that feel they are stable investors and could make more money in the stock market than waiting for the money to come in check by check?
Probably not. Most people aren’t.
Investing in the stock market is not defined as a hardship and would probably be denied by a judge. The reason being is unless you are a licensed stock broker, investing in the stock market can be very volatile, and you could lose your entire award. That wouldn’t be good on any level. However, there have been some cases where it was approved, and in those cases, the majority of the time the claimant had an excellent paying job, so the risk of not being able to meet living expenses was minimal.
Chances are, that isn’t where you are either.
So what is a valid reason for selling? Areas that are looked up favorable are investing in a stable business or using the proceeds to go back to college to get or finish a higher degree of education for either a promotion at work or a better career. The judge is mainly looking at the decision to sell to make your life and the lives of your family members better. That is the key: to improve your life and the lives of your family.
That’s a pretty simple test, right?
The reasoning is simple. By getting a better education or by investing your money wisely, you could take your current award and make a lot more money in the long-term either with a successful business or a better career path with a college degree. The key is the decision will stabilize your family environment which will lower the financial stress and allow for you to be a more consistent provider financially.
Isn’t that what you really want?
Are there other good options? Absolutely. Judges also like an investment into a home of your own or improving your current home, including repairs. While a home will not bring you any additional income, it will provide stability for you and your family, and usually will result in a lower payment than your current rent, which will also help to manage your month-to-month expenses.
Let’s say that you are currently a homeowner, but you are behind on your payments, and you are risking foreclosure. Judges are sympathetic in cases where you have hit a hard spot in life and just need a little boost to make things right. What if you had a massive credit card debt or a second mortgage, school loans that are causing you financial stress as the payments are too high for your current level of income? These are solid reasons to cash in your annuity. As long as you are financially disciplined, and are a small risk of going into debt again, the possibility of being debt-free could remove all the stress you feel right now. Judges know that the fear of debt isn’t just a weight on your mentally, but also physically as it has been proven to cause health related issues.
Another reason why you may need to look into selling your payments is for medical and/or health reasons. If you or a member of your family has been injured in an accident due to their neglect or was very sick, chances are excellent you have a mountain of medical bills that seem too high for you to ever pay. The stress of debt collectors calling you is causing stress that is making a difficult situation even worse. The judge may view your health and/or the health of your family member is far more important than any amount of money. Getting the proper care or paying off the medical bills is an entirely valid reason for selling your structured settlement.
Judges will rarely if ever, refuse a request to sell an annuity structured settlement that cites medical reasons, so long as the reason can be justified beyond just your word. Having documentation from your family doctor, or submitting the current outstanding medical bills is often enough proof to get it approved. Your contact at the structured settlement buying company will inform you of exactly what you need to provide to get the approval needed.
The bottom line is, the more information you can give your legal representative, the more likely you are to get the sale approved by the judge. Keeping information from your legal counsel, no matter how embarrassing, will end up hurting you and could get you turned down. You legal representative is there to help you. Always remember that.
By using our guide, you can sell your future structured settlement payments for the cash you deserve.