At some point, you may need cash for expenses that come about unexpectedly. If you have a structured settlement, you might fear that money is tied up forever. However, you could sell part or all of your payments to a structured settlement company. Fairfield Funding, DRB Capital and CBC settlement funding are among the best structured settlement companies.
One of the easiest ways to get the funds you need is by selling assets. With this method, you can convert your structured settlement into cash in a few steps. Before you sell your settlement, make sure you understand all of your rights and responsibilities.
Finding the Best Structured Settlement Company
The characteristics of a structured settlement buyer are important to consider. Not all of them are created equal. Some of the criteria a good company to work with should have include:
- Transparent and professional customer service without pushiness.
- Strong experience in the industry.
- A strong BBB rating.
- Few negative reviews on rating sites like Yelp.
- No hidden fees.
- Free quote put in writing.
Understand Your Selling Options
There are a variety of ways to get cash out of a structured settlement. If you decide to sell your entire settlement amount, consider taking advantage of the lower payment that will be offered to you by the buyer.
Partial sales usually involve selling only some of your settlement. As the settlement owner, you’ll still benefit from the funds coming from long-term contracts. On the other hand, selling all of your structured settlement payments allows you to use the funds in the best way possible. However, it also means that you won’t be able to get back the full amount. Planning is important to ensure you use the funds efficiently.
Selling Structured Settlement Payments Process
Regardless of the type of transaction you choose, the following steps will still apply.
- Get a Quote: Before you start the process, you must understand the terms of the transaction and how much you could get. Be sure to get the terms of the transaction in writing. Doing so will prevent you from getting lured into making a hasty decision without fully understanding the terms.
- Obtain Court Approval: Before the deal can be approved, a hearing will need to be held to ensure everyone’s best interests are being taken into account. Depending on the circumstances, you might have to appear in court or have someone from the structured settlement company represent you.
- Access Your Money: The buyer will not receive the structured settlement cash until after the court hearing. You will need to contact your insurance company to coordinate the transfer. Exactly how long the process takes will depend on the company you work with. The payment options you can choose from will also vary from buyer to buyer.
Why You Should Sell Your Structured Settlement for Cash
The terms of structured settlements are usually limited. In most cases, they can no longer meet the recipient’s needs. Cashing out a settlement can help people avoid experiencing financial difficulties. Sometimes, people regret choosing to settle with years of settlement payments instead of a lump sum payment.
Reasons to sell your settlement payments for cash can include paying for a home, financing your education, investing in a business, buying a new car and paying off your debts. Although selling all of your settlement payments is possible, there are also various other ways to get cash out of a structured settlement. One of these is by selling a portion of it.
In most cases, you do not have to worry about the terms of your settlement. There are numerous ways to get cash out of it. Factoring companies, for instance, can offer to convert your remaining payments into a lump sum payment. They can then quote a price for the deal.
Unfortunately, selling a structured settlement does not allow you to receive the exact balance of your settlement. The buyer will typically offer a discount rate, which is less than the settlement’s total value.
Understanding the Discount Rate
The following steps will include any transaction type you choose. When looking for quotes from potential structured settlement buyers, it is important to fully comprehend the terms of the discount rate.
Although it might seem unlikely at first, the discounted rate is a portion of the settlement that’s less than the full value that the buyer will receive. The discount rate that a factoring company can offer a potential customer is usually based on various factors such as the entire value of the settlement and the timeline for the payments to be made.
Although the discount rate may vary depending on the buyer, it is typically not zero. In most cases, the customer pays for the access to cash now instead of waiting for the full settlement in the form of payments.