Structured settlements offer individuals discipline, spendthrift protection, and the ability receive payments on a predetermined schedule.
They also provide you with the opportunity to capture great opportunities when they present themselves. This could be a way to get out of debt, start a business, go back to school, or invest in your family.
How It Works
When a lawsuit settles, the court will usually set up a structured settlement to provide ongoing, tax-free payments. The payments can be large, but they also can be small.
Structured settlements can be awarded for work-related or personal injuries. No matter what your reason for seeking the settlement, it can be a valuable financial tool that can help manage unexpected and unplanned expenses.
You may be able sell all or part of a structured settlement if it is too large to meet your current needs. JG Wentworth can help you with this simple process.
You must select a factoring company to buy your rights to future payments. This will allow you to sell a structured settlement. Make sure you do your research to get the best price. You can do this the same way you would search for a car, or for any other purchase you want to make.
Why you should sell your structured settlement
If you`re facing financial challenges or a significant life event, selling your structured settlement payments can provide you with a lump sum that`s easy to manage. This is a great way for you to reach financial goals such as buying a house or starting a company.
However, you must have a reason to sell your structured settlement before you do so. This is important as judges are more attentive to these transactions.
The most common reasons for selling structured settlements include debt and money shortages. By cashing out your payments, you can eliminate high-interest debt and reduce stress associated with a shortage of funds.
The price you pay for a cash-out transaction is typically a discount rate that can vary between 9% and 18%. This price is mainly based on future interest rate assumptions of the buyer company.
How Much Money You`ll Get
A few factors will affect the amount of your structured settlement. The discount rate is a percentage of the settlement`s current value. It can range from 9% to 18%.
Another factor is the amount of payments that you are able to sell. If you get $1,000 per month from your structured settlement, you can sell six months worth of that money for $6,000.
You will need to give a reason for selling a portion or all of your structured settlement. Before approving the transaction, judges will examine your reasons.
You might need the money to pay urgent medical bills or pay for home repairs. You might decide that the payments are not a good investment.
The Process
Selling structured settlement payments for cash can be a great way to get the money you need. People often want to purchase a house, pay off college loans or start a company, but annuity payments aren`t enough to cover these expenses.
First, determine why you are looking to sell your structured settlement. Your reason must be compelling for a judge to approve the sale, as they base their decision on whether it`s in your best interest.
The whole structure settlement can be sold, or you may sell a set number of monthly payments or a dollar amount. The full sale may give you more cash upfront, but it could mean you won`t receive any future payments and won`t have as much long-term financial security.
Selling your structured settlement to a factoring company can be a good option, but it is not without risks. Factoring companies charge a discount rate on the sale of structured settlements, average discount rates range from 9 to 20 percent and are intended to offset the risk assumed in the transaction.