Should you sell your settlement?

What will you do when someone approaches you to purchase your structured settlement from a personal injury?

Selling Your Settlement

What is your settlement worth?

Structured settlement pay-ments, annuity payments and prize winnings paid in the future can be accelerated via court order transfer for a lump sum of cash today...read more

 

Know the tax rules

The tax rules are different for sales of court settlements and for other types of sales. For example, the seller of a court ordered annuity generally is not taxed. However, the seller of life insurance in a life settlement will pay taxes on a portion of the sale proceeds...read more

Choosing the Right Settlement Buyer

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How do you choose the buyer you want to work with in selling what might be your largest financial asset?

Choosing the right structured settlement buyer can seem overwhelming. It helps if you know the right questions to ask to gather the information you need.

 

It is fairly easy to just go with the highest quote you obtain, and that may be the best result. However, before chosing that buyer, you first should get comfortable with the company and its reputation. You are about to enter into a complicated legal transation when you well a structured settlement. Just like the successful conclusion of your lawsuit depended on the skill and experience of your lawyer, you will be relying upon the structured settlement purchaser to guide you through this new process of obtaining your money.

 

Don't be afraid to question anything that is unfamiliar or that appears suspicious. If the representatives can't answer questions to your satisfaction, or if they take a long time to respond, you might consider looking for another buyer. Remember it's your money and you will only get one chance to do this right!

 

Here are questions to ask and information to know about any potential structured settlement buyer:

 

1) How long have they been in business?
2) How many structured settlement purchases do they do a year?
3) Are they familiar with your local courts and state practices?
4) What is the quote for your structured settlement and are there any conditions?

5) How will they price your structured settlement?
6) What discount rate did they use in the quote?
7) Is their contact and business information verifiable?
8) Are they bonded or insured?
9) What is their underwriting criteria?
10) How is their Better Business Bureau rating?
11) Do they handle your type of structured settlement?
12) What is their success rate in obtaining structure settlement requests in your state?
13) Can they provide a time table for the process?
14) Do they use multiple financing sources for your quote?
15) Are they a principal or a broker?
16) Are they associated or member of a larger corporation?
17) Are they members of trade and professional organizations?
18) Are they professional in all communications and business presence?

19) Can they provide professional references of lawyers who would recommend them?

As you proceed, you will find there are many buyers who want to buy your structured settlement, and you will need to carefully consider which buyer to use. In that sense, is is a seller's market. Don't just rely on the commercials these companies use, that advertise quick money for little hassle.

 

Keep in mind that this will be a one-shot deal for you. Once you choose the buyer, you will be relying on that company to do what they are promisig. That is why it is in your interest as the seller, regardless of the kind of buyer you are looking for, to hire a lawyer to assist with the sale. Your lawyer can help in many ways, starting with considering a fair value for selling the settlement, then reviewing the buyer's quote and the subsequent sale contract. Your lawyer also can represent you in court when the time comes to go in front of a judge and explain the reasons for selling.

 

There are a many buyers wanting a piece of the structured settlement market. Choosing one who will provide quality service and fair pricing can seem daunting. Here are some more pointers to keep in mind as you go through this process.

 

  1. Buyers are in this to profit from buying the structured settlement. The more professional buyers will treat you with respect and try to structure a deal that will be fair to both sides. Listen to the sales pitch carefully. If they say that clients must sell their entire annuity or if they offer a considerably lower quote than expected, be careful.
  2. The Better Business Bureau keeps files on companies that buy settlements, as they do for other businesses. Most likely there will not be any information about the particular buyer, but it is always better to check first before entering into an agreement of this importance.
  3. Be clear about whether you will be responsble for paying any costs. For example, there are costs involved in selling a structured settlement, including the court costs for judicial review. Some settlement buyers will pay those court costs and any fees involved, and some won't. Just because the settlement buyer pays the costs doesn't make them better, but you don't want any surprises.

 

Doing simple research will allow the seller to select a buyer with the ability and knowledge to work through the selling process, and the integrity to make this a fair transaction.

 

You should always get legal and tax advice from a qualified lawyer and other finanical professional about your your personal situation.