Get the Money You Need by Selling Your Structured Settlement Annuity

Many people who become injured and are due a monetary settlement end up getting a structured settlement. This means that their settlement is broken up into payments and disbursed to them over an extended amount of time. Sometimes, the injured party decides they would be better off receiving a lump sum rather than a series of payments. When this happens, they often decide to sell their structured settlement annuity in exchange for one large payment.

There are investors out there who specialize in buying structured settlement annuities. If you're an accident victim who is entitled to a settlement, you might actually be approached by individuals who buy structured settlements or even by companies called factoring companies. Basically, the individual buyer or factoring company will offer you a lump sum payment that is approximately 15% less than the total value of your structured settlement annuity payments. The buyer doesn't care what is best for you, rather, they care how much money they can make off the deal. The buyer will take over receiving your settlement payments and can often make a large amount of money over the course of however many years the annuity is for. Even though you'll be losing money, it can still be a win-win situation if you decide selling your settlement is the right thing to do.

It's true that if you sell your structured settlement, you will receive less money than if you kept it. Not only will you lose that 15% or so, you'll need to think about the costs of inflation. There may also be tax issues to consider. The taxes on a large lump sum payment might add up to a substantial amount of money. In some states, you will need to go before a judge to get authorization to sell your structured settlement annuity. The judge will examine the details of your case and decide whether or not you should be allowed to sell your settlement. Usually you will be allowed to sell, as long as you are over 18 years of age and have a valid reason for wanting to do so.

Prior to selling your structured settlement, you should consult with an attorney, tax specialist and financial advisor before making a decision. With a transaction as large as this, it's very important to weigh all the advantages and disadvantages before proceeding.

Copyright 2007 Jim Sterling - All Rights Reserved

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