When bills come knocking or you’re smack dab in an emergency, one way to get yourself some quick cash is selling your structured settlement. It’s a seemingly tricky prospect, but it’s actually more straightforward than you’d think. You can sell a portion or all your structured settlement to a factoring company and ease your financial burden.
The downside to structured settlements is that you’ll receive regular payments over a set period. This can be a significant setback when you need the lump sum to achieve your financial obligations. Some entities will gladly buy your settlement, but how do you sell your structured settlement?
This comprehensive guide will expound on how to sell your settlement to get fast cash for whatever reason.
What Is a Structured Settlement?
A structured settlement is a series of consistent payments the defendant makes to the plaintiff after losing a civil case. A structured settlement is similar to a regular settlement. The only difference is that structured settlements are split into a series of payments, while a regular settlement is a single lump-sum payment.
Structured settlements are typical with cases where the defendant has to pay a large settlement. Structuring the settlement helps ease the burden of making a one-time payment. In most cases, the at-fault party considers structured settlement annuities, which are agreements for guaranteed payments over a particular period.
Steps to Selling Your Structured Settlement
If you’ve been mulling over the idea of selling your structured settlement, then you better do it the right way. Selling your settlement is an intricate process that requires your utmost diligence.
Here are the steps to follow when selling your structured settlement.
Step 1: Decide How Much Money You Want
The first step to selling your structured settlement is figuring out how much money you want from the settlement. Remember, you can sell part or all of your settlement, depending on your financial needs. However, you can’t get an amount that exceeds your settlement amount.
Note that the sum of the regular payments you’ll receive over time will be higher than the initial settlement sum. If you’re selling the settlement, you’ll have to sacrifice the extra amount of dollar cash you’ll receive from the entire settlement. However, that’s the only way the factoring company can make a profit.
In some cases, you may end up getting half of what you’d get if you’d have waited out the settlement. That’s why it’s so important to figure out the exact amount of cash you want to sell before signing any papers. For some situations, you’re better off accruing the periodic payments and getting a large amount.
Step 2: Contact the Factoring Company to Get Quotes
After deciding how much money you want from the settlement, the next step is to call the factoring company. The factoring company is the company that buys your settlement, and the quote is how much the company is willing to spend on your settlement.
If you’re smart, you’ll get quotes from different purchasing companies. That way, you can choose the best quote and get the maximum amount of cash for your settlement. However, be careful of sketchy companies with ridiculously high quotes; they may be illegitimate companies.
You can check out the company’s review on the Better Business Bureau to know who you’re working with and discover the company’s reputation. Companies listed on the BBB are more likely to be legitimate and offer stellar services.
Steer clear from companies like JG Wentworth; the infamous company known for ripping off most, if not all, of its companies. If you really do your homework, you’ll find a credible company that will give a great quote for your settlement.
Step 3: Compare Your Options
There’s no shortage of factoring or settlement purchasing companies in the country. So when you want to sell your settlement, you probably have a couple of options to choose from. As such, before settling on a purchasing company, make sure you first explore all your options.
Also, before signing any agreement, make sure you carefully read the fine print. In case you have sections of the agreement that aren’t clear, you can always ask for clarification. That’s the only way you can be satisfied with the purchasing company.
Make sure you also do your homework to be fully confident in the company you settle for. Visit their website, for starters, and get more information about the company. Talk to their reps and customer service to get a picture of what kind of company you’re working with.
Step 4: Pick a Company
From your choice of companies, pick one that works for you. The company should have a good reputation, be a registered company, and give you a reasonable quote. After picking the company, you can proceed to complete the paperwork.
The paperwork includes:
- A comprehensive application for selling the settlement
- A copy of your annuity from the court
- At least two forms for identification reasons
- The release agreement and a copy of the structured settlement
After clearing all the paperwork, you’ll have formally sold your settlement to the company in question. The company will arrange for you to receive your money as soon as possible.
Step 5: Ask for an Advance
There are a lot of processes that must take place before you get money in your bank account. However, if you need urgent cash, you can always request for an advance. The advance is a partial payment that should hold you before the entire amount arrives.
Note that it’s totally up to the purchasing company to give you an advance. You can’t demand an advance from the company.
Step 6: See the Judge
You’ll have to see the judge before you seal the deal. The purchasing company will make arrangements for you to see the county judge. It’s a seamless process that only involves a few questions, and then the judge gives you the green light.
What You Should Know Before Selling Your Settlement
Now that you know how to sell a structured settlement, don’t go rushing into selling yours. Here are a couple of things you should take note of before selling your settlement.
Selling Your Settlement Isn’t a Very Prudent Financial Move
Remember, you get less than what you would’ve gotten if you opted for the settlement’s regular payments. So whatever the case, you’re always on the losing side when you decide to sell your settlement. However, selling your settlement may be the best move for medical emergencies, education fees, or so on.
After getting your settlement, don’t spend it on unnecessary items, or you’ll lose even more. If you make wise financial decisions, you can turn the tables and be the winner after selling your settlement.
The Factoring Company Lawyer Doesn’t Represent You
In case you experience any legal trouble while selling your settlement, take note that the factoring company’s lawyer doesn’t represent you. This is a trick most purchasing companies use to make your think you’re covered in legal battles. In case of any legal tussle, hire your own lawyer.
Little Details Matter
While you may be excited to get your money, don’t let the little details pass you by. Selling your settlement involves a lot of processes that shouldn’t be neglected. Regardless of how tiring or frustrating the process is, never miss out on the important details.
The most important thing you should note is how much money you expect from the purchasing company. Remember, a structured settlement is a lot of money, and it would be unfortunate if you lost most of it because of overlooking minor details. Make sure you read all relevant documents and take notes of critical information.
One thing you should be very keen on is any affidavit of payee the company tells you to sign. Be on the lookout for any inconsistencies. Inconsistencies with formal documents are a definite red flag that you should never overlook.
You Won’t Get Cash on the Same Day You Sell Your Settlement
Note that you may not receive cash on the same day you sell your structured settlement. You first have to get approval from the court before the buying company deposits any money in your bank account. The court ensures that this transaction is in the best interest of both you and the purchasing company.
However, if you can’t wait that long, you can always ask for an advance. You’ll only receive part of the payment, but it’ll solve your financial emergencies.
Selling Your Structured Settlement Should Be a Breeze
As you can see, there’s nothing much to selling your structured settlement. All you have to do is follow the above steps, and you’ll be good to go. Make sure you do your research before settling for a factoring company to get the best deal.
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Danny White is a freelance writer who offers to ghostwrite, copywriting, and blogging services. He works closely with B2C and B2B businesses providing digital marketing content that gains social media attention and increases their search engine visibility.