How to Sell a Structured Settlement
Choosing to sell your structured settlement or annuity is a big decision, but one that can prove beneficial in the long run. Maybe you have plans that would require a substantial investment, such as building a home or starting a small business. Or possibly you just need the funds to catch up on bills before they become overwhelming.
The process of selling your future structured payments is called factoring. Once it is complete, you have given up your legal right to receive any further payments after the lump sum. From start to finish, factoring can take from 60 to 90 days, so if you are in need of immediate cash, it may be more helpful to apply for a personal loan at a bank or other financial institution.
There is an influx of new businesses out there that buy structured settlements, but not all of them are trustworthy. Before agreeing to a quote online or on the phone, do the proper research. You may find it useful to consult with a settlement broker, who has experience dealing with these companies and a thorough knowledge of tax and settlement processes. If you choose to go on your own, the process will usually involve the following steps:
- Gather the appropriate papers together, including statements regarding the annuity amount and date paid each month, and information regarding the insurance company that is making payments.
- Meet with a consultant or broker to discuss your options and to fill out paperwork. Some of this paperwork may be completed on-line, but eventually an in-person interview will be necessary.
- The paperwork will be forwarded to the company underwriter, who will provide you with a quote of how much you can expect to receive.
- If you are interested in moving forward with cashing your settlement, a contract will be drawn, which you can then review. It is suggested that you take the contract to a lawyer for a final review.
- After the contract has been signed and agreed-upon, inform the insurance company that pays your annuity that you plan on selling.
Due to a 2002 law enacted by President Bush, the U.S. court system will have the final say as to whether you can sell your structured settlement or annuity. They will hold a hearing to decide whether selling is in your best interest. While you don't have to attend, it is recommended so that you can validate your reasons for wanting to sell. If your request is approved, you'll receive a court order providing further information. It is not unreasonable to receive a check within five to ten days of the issuance of the court order.