Everything You Need to Know Before Selling Your Structured Settlement
- You can sell your structured settlement or annuity in one lump sum but it requires time and effort.
- Your structured settlement is a legal agreement that was created in court, therefore it takes a court to make changes.
- There are many companies that will buy some or all of your future payments but the lump sum you ultimately receive will be for a reduced amount.
- Companies interested in buying your structured settlements or annuities are often highly motivated to be as helpful as possible since they don’t get paid until you do.
- If you’re interested in a risk-free quote for selling your structured settlement with zero commitment, call 1-844-500-1132 to get started.
So why would you think about selling your structured settlement or annuity? By and large, most people are happy with their structured settlements or annuities. It’s guaranteed income for years to come, maybe even the rest of your life. It’s also in a strict contract called an annuity, which protects you with the full power of the law.
But there is one major downside to a structured settlement: it’s fairly locked in. And if the circumstances change and you need money right away, you’ll wish you had access to your remaining settlement money.
What makes this so tricky is that the money in your settlement partially still belongs to someone else. In the case of a structured settlement, it probably belongs to an insurance company. To make things even more complicated, your settlement is a legal agreement that was created in court. You cannot simply cut a deal with the insurance company.
So what are your options? It’s your money, after all. Luckily, there is a way to gain access to your own money.
How Selling Your Annuity Works
So before we start, we should explain that everything we’re going to detail will apply for selling your structured settlement OR an annuity. We’ll refer to them mostly interchangeably. But that doesn’t mean they’re the same in every respect. We can come back to that later though.
There are many companies that will buy some or all of your future payments. They will give you the lump sum that you need, and in return they will receive your payment money. Some companies can give you an upfront cash advance while you are waiting for the issue to be resolved in court (more on that later) Of course, these companies must make a profit, don’t expect them to trade dollar for dollar. The lump sum you ultimately receive will be for a reduced amount.
But often, if you are in a position where you need cash, speed is what’s most important to you, and you’ll be willing to accept a smaller sum that you can access immediately. Luckily, buying annuities is a fairly competitive market, and some companies will offer better rates than others, which could translate to thousands of dollars for you.
It’s also worth considering that you don’t need to sell ALL of your annuity. You can sell a portion of it and still have future payments. Buyers are usually flexible here, so do your research and ask for what you need.
Going to Court
Once you find a buyer for your settlement, you need to go before a judge and request that the contract you made with your insurance company be amended. While this sounds intimidating, it’s not. For one, this isn’t uncommon in the legal system. It’s a fairly speedy process (as in weeks or months, not years.)
Beyond that, the courts are actually protecting you here. A judge will ask you questions about why you need money now. They’re trying to make sure you’re not being taken advantage of. Make sure you have clear reasons for this. If you’re trying to buy your first house, or you have an unexpected medical bill, you will likely have a good case.
Some states will even require an attorney for this part. Which isn’t a bad idea even if it’s optional.
Other Things to Keep in Mind
The buyer of your annuity will take some profit for themselves; we already know that. But there will be some other payouts to factor in. For one, the insurance company that was paying you in the first place probably put a clause in the original annuity contract for a “surrender fee” in the case that you sold all or part of your structured settlement. This account’s for the interest they will lose buy paying you a lump sum.
Also, the state you live in may also charge taxes depending on your situation. The Federal Government may also charge some taxes.
Don’t Go It Alone
If selling your structured settlement it sounds complicated, that’s because it is. Luckily, the companies interested in buying your structured settlements or annuities are often highly motivated to be as helpful as possible. They want to get your money in your hands as bad as you do. They don’t get paid until after you. They’re often very willing to walk through various payment options and approaches for you.
Here’s an idea, if you’re interested in a risk-free quote for selling your structured settlement with zero commitment, call our number below and let us put you in touch with an expert.
Dial 1-844-500-1132 to get started. The call and consultation are both free.