What is a Structured Settlement?
Structured settlements are a steady stream of payments that a consumer can get after an injury, accident, or workers compensation claim. Whatever individual or company that has to pay out a structured settlement will purchase an annuity contract from an insurance firm. Settlement payments are guaranteed for the duration of the contract. They are predictable and certain.
However, circumstances can change. You might want to buy a house, incorporate and advertise a business, find a wife – whatever life-altering thing you want to do. Those kinds of life-altering things usually cost a lot of money.
Purchasers of Structured Settlements
Individuals or businesses that purchase structured settlements and annuities are part of the secondary market. Federal laws safeguard structured settlement & annuity owners who want to sell their structured settlement payments. This spinoff industry is tightly regulated.
Trading a steady stream of payments for one lump sum can be really enticing to some structured settlement owners who need money now.
Before you sell your structured settlement payments to anyone – whether a close family friend or a structured settlement company you see advertised on TV – it is crucial to seek the advice of a good attorney. If you don’t know how to choose a good attorney, you might want to talk to the attorney who originally negotiated the case for you. If you cannot reach that individual, you could contact the office of your state’s attorney general.
Nearly every state (47 as of this blog post’s publication) and the federal government have put tough structured settlement protection laws in place that outline strict conditions for these kinds of transactions, called “structured settlement factoring transactions”. According to federal law, for example, court approval is needed for injury victims who want to sell payments from a structured settlement to someone else, whether an individual or a corporation.
You might find it interesting to know that several organizations, e.g., the National Organization on Disability and the American Association of People with Disabilities, have tried to draw attention to the practices of companies who purchase structured settlements.
However, the CEO of J.G. Wentworth, one of the main firms behind all of those TV commercials you see late at night, says that selling structured payments is one of the safest financial transactions a person can enter into.
Check out this mini-guide to help you evaluate structured settlement buyout offers.
“Get Cash Now For Your Structured Settlement!” TV Ads
You might have seen a late night television ad promising immediate access to your money. “It’s your money!” the ad goes, and you are prompted to call a number to find out how you can sell your structured settlement payments for a lump sum.
There are quite a few companies advertising to structured settlement owners. Just who are these “cash it in and get your cash now!” folks? These ads are bought by factoring companies. These firms want to buy up structured settlements at a discount from injury victims who are getting structured payments but whose circumstances dictate that they have access to all of that cash immediately. Most states require a court hearing before the structured settlement can be sold.