Structured settlements provide individuals with discipline, spendthrift protection and the ability to receive payments on a predictable schedule.
You also have the chance to seize great opportunities that may arise. That can mean getting out of debt, starting a business, going back to school or investing in your family.
How it works
A structured settlement is a payment plan that provides ongoing tax-free payments to the parties after a lawsuit has been settled. These payments can be very large or they can be quite small.
Often, structured settlements are awarded for personal injury or work-related injuries. Regardless of your reason for receiving the settlement, it is an important financial tool that can help you manage life`s unexpected and unpredictable expenses.
If you receive a structured settlement that is too large for your current needs, you may be able to sell all or a portion of the payments. The process is simple and straightforward, and JG Wentworth is ready to help.
In order to sell a structured settlement, you must choose a purchasing company or factoring firm to purchase your rights to future payments in exchange for cash. Do your research and shop around to find the best price. This can be done in the same way as you would for a car or any other purchase.
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.
But before you sell your structured settlement, make sure to establish a valid reason for doing so. That`s important because judges scrutinize these transactions more closely.
Among the most common reasons to sell structured settlements are money shortages and debt. 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
If you want to sell your structured settlement, the amount you get will depend on a few factors. One is the discount rate, which ranges from 9% to 18% of your settlement`s present value.
Another is the number of payments you sell. For example, if you receive $1,000 per month through your structured settlement, you could sell six months` worth of those payments for a lump sum of $6,000.
You will need to give a reason for selling a portion or all of your structured settlement. Judges will review your reasons for selling before approving the transaction.
It is possible that you need to borrow money to pay medical bills, or for repairs at home. Or maybe you`ve reached a point in your life where the payments are no longer a good investment.
The Process
Selling structured settlement payments for cash can be a great way to get the money you need. Often, people want to buy a home, pay off college loans, or start a business, but annuity payments don`t cover their expenses.
First, determine why you are looking to sell your structured settlement. A judge will only approve the sale if you have compelling reasons.
You can sell your whole structured settlement, or you can sell a certain number of monthly payments or a predetermined dollar amount. While the full sale will give you more cash upfront it may not result in any future payments or financial security.
Although selling your structured settlement to factoring companies can be a great option, it comes with 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.