What is my structured settlement worth?
To make the proper calculation, using one of the many online calculators is often a waste of time as there are so many factors at play regarding what your annuity payments are worth. It is best to call the recommended source, DRB Capital at 1.800.577.5985. They are the top recommended company per our strict standards. Remember that calling the wrong company can be a costly decision for you.
Is selling my structured settlement the right thing to do?
How much does it cost to sell my structured settlement?
In regards to “cost,good” there isn’t any out of pocket expenses you will incur, and if a company says that they need a “good faith payment” to get you the best deal, hang up immediately. There are no fees that you need to pay upfront. The government is even clear on that. Instead, the fees are deducted from the amount you will receive as a cash payment.
All fees must be fully disclosed in the transaction documents before they are processed. This is law. Always know all the costs before agreeing to sell. Always.
The real cost you will incur of selling your structured settlement lies in the discounted rate which companies buy future annuity payments for. You should go into this process knowing that all structured settlement companies are in the business to make a profit, and no one is just going to “do you a favor” out of the goodness of their heart. The right company for you is one that will make you a fair market value offer that’s right for you and also good for them. A “win-win” so to speak. Realistically, you can expect to lose as much as a third off the total remaining value of your policy, which includes discounted rates, deductions, fees, etc.
I’m Looking For Companies That Buy Structured Settlements?
If you are like most individuals who are in a financial pinch and need your cash out now, you probably feel overwhelmed with all the different choices of companies, promises, expectations, and industry jargon that is just downright confusing. Read our reviews, do your homework, and in the end, make the decision that feels best for you. When in doubt, sleep on it and make a decision in the morning. Never fold under pressure to someone on the phone. Talk it over with your spouse, or someone you trust before making a decision. A legit company will respect that and will want what is best for you instead of pressuring you because they want a commission. Don’t confuse this process with a loan settlement company or financial institution.
What should I look for with so many structured settlement annuity companies?
As we have stated throughout our reviews, you want a company that is reputable, knowledgeable, has integrity and can handle your case from start to finish. The last thing you want is to have to reexplain your issue over and over again as you are assigned from person to person, or possibly, company to company.
I have a structured settlement, and I need cash now – What do I do?
Your best course of action is read all of our reviews, call our top pick, DRB Capital at 800-577-5985 and speak to an experienced rep on the phone. They state they guarantee you will get the best offer with the lowest fees in the industry or they will pay you a cash payment for your trouble. That’s a low-risk phone call. Just say “I want to sell my settlement” when they answer the phone. They will take it from there. The process to sell your structured settlement will be easier and less stressful for someone who has a wealth of experience guiding you each step of the way and helping you will all the paperwork needed to get your settlement payout.
Are structured settlements taxable?
By precise definition, nearly all (there are some rare exceptions) structured settlement payouts are not taxable. However, if you choose to get a lump sum payout and sell your structured settlement, you may be liable for taxes on the payment. When it comes time for your payout, according to state and federal tax laws (which may have changed since this publication took place), there will be a structured settlement taxation upon approval by the state judge to sell your structured settlement. This also includes selling a portion of your structured settlement. Your structured settlement funding companies attorney should advise you on your tax liability.
What are some of the most approved structured settlements investments?
Furthering your education to get a better job or advancement in your present company. Paying off debt. Avoiding foreclosure. Medical bills or needed medical treatment. Starting or investing in a business.
What should I keep in mind?
Understand Your Legal Rights
Not knowing what your rights are before you start any significant financial transaction is not a wise move. First off, you should know that it is entirely legal (per laws passed in 2002) and ethical to sell your future entitlements. However, both parties in the original transaction may be required to meet state issued conditions as specified by state law.
Most US states have laws which protect you against risk, but even with these laws of protection in place, you must know the legalities of the transaction before starting down this path, so there are no surprises at the end. The key to this process is properly educating yourself to ensure the right decision is made in the end.
Ensure You Have a Viable Plan – Stick To The Plan
By keeping these common mistakes in mind and carefully evaluating your current financial status, you can understand and also communicate to the broker your exact status which will allow them to advise you better on the proper plan for you to take. Because once you sign on that dotted line, there is no going back. This is why it is wise to consider all other options first and only chose to sell your future entitlements if no better option exists.
Obtain Quotes From Multiple Companies
Getting multiple quotes from various selling company firms that you feel good about is always a wise move. This way you can compare not only the different cash offers but the fees and how long each company estimates it will take to close the deal.
What if I’m behind on my house payment?
If you have a past due mortgage or mortgages, you can use your structured settlement to get caught up, or even pay off your house completely, so you no longer have the debt. Most judges do not want to see people lose their homes and it is a need that is often approved.
When will my funds be made available?
There are many variables with each settlement account. Each is unique and often has specialized issues which must be properly addressed. Generally speaking, you should expect your funds in 3-5 business days from the judge’s ruling in your favor.
I heard on the news that there could be some changes coming with the new administration coming in. Should I be concerned?
While we don’t have any inside information about what the new administration will do or not do, if you have a reservation or are nervous at all, it is best to go with your gut and sell your settlement and get your cash now.
What does the word “discount” mean when I am getting quotes for my account to sell?
A lot of brokers will use terms which you think it means one thing but actually mean another. When you hear the word “discount” you are thinking in your head it is something in YOUR favor. Nope. The “discount” in this situation is referring to the “discount rate” or “discounted present value” of your account. In other words, it is the discount from which your account is worth and what they are going to pay you. The bottom line is the “deal” is there, the factors depending on which side of the table you are sitting.
What is Structured Settlement Protection Act and what it means for you?
What you don’t know can hurt you especially when it comes to your structured settlement annuity and the options you have in cashing it out for a lump sum payment instead of waiting for the duration of the annuity. By fully understanding the structured settlement protection act, you are ensured of making the right decision for your financial future. Never make the mistake of just taking someone’s word for it on what it means, actually read it.
Each state has their own, which vary from state-to-state, but the core is essentially the same. Just type in “Structured Settlement Protection Act (your state)” into Google (and replacing the parenthesis and “your state” with your actual state) to get the law of your state to review. We have posted the law per the state of Virginia.
Mostly, the Structured Settlement Protection Act of 2002, as it’s known officially, was designed to protect people who wish to sell all or part of their annuity the received as a result of a personal injury claim. As a result, any transaction involving a structured settlement must be approved by a judge in a state court before it can be sold. This is in the express interest of the current holder of the structured settlement and for their financial stability.
Another condition of the protection act is that insurance companies that are responsible for paying the settlements are also involved in the process of any sale. Before the law came into being, many times the insurance company wouldn’t be told the annuity had changed hands until after the deal was done. The act requires that all interested parties are now informed of any sale or part-sale involving structured settlements at least twenty (20) days before a court hearing takes place.
Requirements of the act are explained below:
The structured settlement act requires that a judge looks into the circumstances of any sale and decide whether or not it is in the best interest of the holder to sell their annuity. Therefore, the client needs to disclose all of their financial information regarding the terms of the proposed sale and their current financial circumstances, which must be handed over at least three (3) days before the signing of any contracts takes place.
The company looking to purchase the structured settlement is responsible for disclosing any information relating to the sale, not the client or the issuer of the settlement.
Following the signing of the documents, the act also requires a three-day “grace” period, during which the client is allowed to change his or her mind regarding the sale.
Cheap structured settlement companies must also advise anyone selling an annuity to seek independent advice about the sale, before going ahead with it. This information needs to be given in writing before the case can come to court.
How does a structured settlement work?
If you were a claimant who was involved in an accident which resulted in a personal injury, wrongful death, or workers’ compensation case, instead of receiving a lump sum of your monetary award, instead, a structured settlement is created. This will pay you monthly or annually usually over the period of 10, 20 or 30 years the full price of your settlement amount.
This is for the claimant’s protection of their financial future. Per IRS Code § 104(a)(2), the settlement money within the annuity and any interest accumulated are 100% income tax-free. Because there is no income tax, the structured settlement, even though it is paid over time, far exceeds the value had it been paid in one-lump sum, and since it is paid over time, there is no chance of squandering the entire sum on a poor financial decision.
Here’s an outline of how a structured settlement works:
Once both parties have agreed to the details of the structured settlement, the claimant (the victim), accepts the monetary settlement and the defendant pays the gives full release of their claim to what is called an assignment company. The assignment company then assumes all liability and purchases an annuity from a structured settlement company or carrier. The carrier then sends the claimant structured settlement payments based on the amounts and timeline (usually monthly) selected by the claimant.
What is a lump sum settlement?
A lump sum settlement is when you are the victim of an injury, workman’s comp, or wrongful death, you are awarded a monetary judgment, and instead of taking the payments over time, you opt to take the money as one lump sum. The pros are obvious; you get your money up-front. The cons are the taxes, which are usually paid before you get your money and they can be a significant portion of your settlement.
What is a lump sum payment?
When you have been giving a structured settlement and your financial situation changes, you can opt to sell your structured settlement and receive a lump sum payment instead of your monthly payments.
Is a structured settlement considered income?
According to IRS Code § 104(a)(2), one of the benefits of a structured settlement it is not considered income, thus the money is not taxable. Because of this fact, the amount the annuity is worth far exceeds the settlement amount, due to no income taxes levied.
Are structured settlement payments taxable?
No, they are not as stated above. Since the money is not considered to be income, it is not eligible to be taxed.
Are lawsuit settlements taxable income?
It depends on how the settlement is arranged and in what capacity. If it is a settlement of an issue other than an injury, workman’s comp or a wrongful death, it may be taxable. There are differing laws in each state. It is best to consult with your tax advisor.
Are settlement payments tax deductible?
If your company is found guilty in a personal injury case, and you must settle with the injured party, since that is an expense, the cost is tax deductible. Consult with your tax specialist for more information.
What is a structured settlement loan?
This is also called a “pre-funding loan” where you have received the judgement in court, and you are awaiting your money which can sometimes take several weeks for the legal process. This loan will give you the money you need right now while you wait for your payments to start. Usually these loans typically are between $1,000 – $10,000.
Is money from a class action lawsuit taxable?
It depends on the type of class action lawsuit. If the lawsuit is over a physical injury, sickness, wrongful death, etc. the IRS treats these types of settlements as non-taxable. However, if the claimant received a tax benefit by deducting the related medical expenses related to the lawsuit on the previous years’ tax returns, then the amount would be taxable.
What is a lawsuit loan?
This is nothing more than an unsecured loan which can carry high interest and fees. Ensure that you get all the information before you sign any paperwork.
How do I sell my Annuity?
Selling an annuity is relatively common and painless.
Unlike selling your structured settlement annuity, if you want to sell your annuity, it does not require a court order. You simply sign a contract, record a change of ownership with the insurance company that issued the annuity, and once the ownership change is complete you receive your lump sum payment.
The process begins with a simple discussion with an annuity purchaser (these are the same folks who will also buy structured settlement annuities). You provide them with information about your annuity, the payments you receive and when they are due, and they give you a quote to buy some or all of your future payments. Of course, you decide how many payments you want to sell and which ones you want to keep. This allows you to get the lump sum you need today and continue to receive payments over time as well. Of course, you can always sell all of your annuity payments to get the largest lump sum possible.
The steps to sell your annuity are as follows:
1. Gather Paperwork
Gather any paperwork related to your annuity, or ask the buyer to help you obtain the information. Having everything on-hand will make the process easier.
2. Get a Quote
Get a quote from an annuity purchaser to see how much you can expect to receive as a lump sum.
3. Decide What to Sell
Make a decision about which annuity payments you want to sell and how much of a lump sum you want to receive.
4. Get a Purchase Agreement
Request a purchase agreement to sell your annuity.
5. Sign and Return the Agreement
Sign and return your paperwork to the purchaser.
6. Buyer Sends You Check or Wire
When the insurance company confirms the ownership of your annuity has been changed, you will receive a check or wire transfer for your full lump sum immediately.
What is a Structured Settlement
A structured settlement is a type of annuity arranged with an insurance company.
Structured settlements are typically issued to individuals who have suffered harm as a result of a personal injury.
In some cases where the victim is owed money from another party as a result of a personal injury, the federal government encourages these victims and their families to utilize structured settlements issued by the insurance company who insured the party at fault. For example, if you were injured in a car accident, you may receive a structured settlement from the insurance company that covered the driver responsible for the accident.
Some of the lawsuits that can result in a structured settlement:
If someone was injured in an accident and another party is found responsible, they may offer to compensate the victim with a structured settlement annuity.
If you have experienced some loss as a result of a faulty product or other loss resulting from the misconduct of a company or individual, that claim could be resolved with a structured settlement annuity.
If you have encountered behaviors which are offensive, threatening, or disturbing, your claim can be resolved by receiving a structured settlement annuity.
If you’ve been wrongfully treated by a medical professional, your claim could be settled with a structured settlement annuity.
The structured settlement annuity is offered by the insurance company who insured the party responsible for the injury as a way to compensate the personal injury claim victim without paying a lump sum of cash up-front.
Sometimes a structured settlement annuity is better for the victim at the time of their accident, but often the victim’s circumstances change and they may need a lump sum today.
The recipient of a structured settlement annuity will receive these periodic payments tax free from the insurance company.
Structured settlements benefit the personal injury victim by insuring they receive a steady stream of future income, which is particularly important for minors or victims who have had life altering injuries and may be unable to earn income over their lifetime.
Why Sell my Structured Settlement Annuity
There are many reasons to consider the sale of your structured settlement annuity.
Often times the reason is simply that the annuity payments coming in over time are no longer appropriate for the needs of the recipient. For example, the structured settlement annuity could have been awarded when the accident victim was a minor, but now as an adult with a full time job they would benefit more from receiving a lump sum of money today.
Sometimes there are very specific reasons why small periodic payments do not meet the needs of the structured settlement annuity recipient, and only a lump sum can help accomplish their goals.
Some of the reasons are:
Buying or repairing a home
Use a lump sum to make a down-payment on your new home or make repairs to your existing home.
Starting or investing in a business
Use a lump sum of cash as start-up capital for a new business or to grow an existing business.
Funding a college education
With the costs of tuition sky-rocketing, you can use a lump sum to pay for college while keeping your family debt free.
Paying off debt
Use a lump sum of cash to pay off credit cards, consumer debt, student loans, and medical expenses.
Divorce can be financially devastating. Use a lump sum to fund your legal expenses up front and get the best settlement possible.
You can use a lump sum to invest in property, stocks, or retirement funds.
Sometimes recipients of structured settlements just want to have all their money today and don’t want to have their asset in the hands of the insurance company.
In some cases, a loan can be considered as an alternative to selling your structured settlement annuity. However, this is often an inferior option to selling your structured settlement annuity because the interest rate on the loan may be high, and you must be disciplined to apply your structured settlement annuity payments to repay your loan. If you don’t, you could end up with outstanding debt plus interest and no more payments coming in to pay the loan off.