Before You Sell Your Payments

Before You Sell Your Structured Settlement or Other Future Payments

The benefits of selling a structured settlement are clear. Fixed payments received over a long period of time decrease in value as inflation increases. What seems like a large payment now may not be a desirable sum in 10 or 20 years, after inflation has hit. Periodic structured settlement payments may not help much with unexpected expenses such as rising education or health care costs, divorce, or other life changes. Structured settlements cannot be renegotiated or paid in advance of the payment due date. Despite these compelling reasons to sell structured settlements, structured settlements recipients should consider the following before deciding to sell their payments from an annuity or other future payment schedule.

Legality

It is legal to sell structured settlements. However, recipients should check the law in their districts to ensure they follow all the necessary steps to legally carry out a sale in that locality. In some states, the sale of structured settlements requires a court order from a judge authorizing the sale. The insurance lobby has reduced the ease of structured settlement sales in Texas, Virginia, West Virginia, Kentucky, Illinois, and Connecticut. Those considering selling their settlements in these states should take special care to ensure that their transactions are legal. Some settlement contracts do not permit the sale of the right to receive settlement payments. We recommend that sellers seek legal advice regarding the sale of their settlements.

Profitability

Deciding to receive a large lump sum payment rather than smaller annuities or other scheduled payments has many obvious advantages, but may not be right for everybody. Before selling, it is important for potential sellers to weigh the amount they are going to receive against the projected payments of their structured settlement. During this process, it is essential to account for the effect of inflation on future payments. That is, $10,000 today will not be worth $10,000 in twenty years. It will be worth less. Note: lump sums received in exchange for scheduled payments will remain tax-free, forever.

Choice of Legal Counsel and Settlement Buyer

We recommend that sellers verify that their attorney has no conflict of interest in their sale. Additionally, we recommend that sellers compare the offers of several potential buyers before making a final sale. It is important to ensure that the price offered is fair, as some companies engage in underbidding.

Despite these concerns, selling structured settlements is a common and convenient way to readjust your income. With proper vigilance and care, the sale can be profitable and hassle-free. Exercising caution while contemplating selling your structured settlement payments or other future payments will help ensure your sale is safe, legal, and in your economic best interest.

Contact Structured Settlement Investments

If you would like to learn more about selling structured settlement payments, annuity payments, lottery payments, or any other form of future income, contact Structured Settlement Investments today.