How To Sell Your Structured Settlement Payments Without Getting Ripped Off
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Sell Structured Settlement Payments
If you are thinking of selling your structured settlement, you are in good company. Across the country, factoring companies—financial institutions that buy structured settlements—buy thousands of structured settlements each day.
Selling your structured settlement can help in many ways. It can provide funds for buying a home, provide seed money for starting a business, or pay off high interest debt. Other people use the funds to purchase a car. One of the best things about selling settlement payments is that you can sell part or all of the settlement, depending on your need for cash and future financial picture.
Whatever the reason and whatever percentage you elect, selling puts you in control of your finances. Living on a fixed income can become terribly confining. It can lead to putting off or never achieving important dreams. Nobody wants to feel they have to defer life's most meaningful pursuits because they cannot access the value of their structured settlement.
Another reason for selling future payments is an unexpected illness or accident causes the need for a sum of cash right away. You can sell your structured settlement to prevent foreclosure, pay taxes, or forestall other debt collection activities. When debt becomes unmanageable, many people sell their structured settlement to return their household to financial health.
Other common reasons include:
- Home repairs
- Education funding
- Divorce expenses
- Travel or vacation expenses
- Moving expenses
- Funeral expenses
Structured settlement payments provide peace of mind. Having the security of knowing a stream of income exists for you and your dependents can be one of the best financial assets; however, inflation destroys the purchasing power over time. When you sell your payments, you gain the maximum benefit from your structured settlement or annuity.
Inflation has fast become inevitable in today's economy. In a globalized world where currencies are no longer tied to gold or other physical assets, people holding cash or living on a fixed income are vulnerable to great losses of purchasing power. In fact, between 2003 and 2017, average prices in the United States increased by 33.66 percent.
Economists define inflation as an increase in the cost of goods and services without a corresponding rise in the value of the currency. Money is just worth less than before. When you sell your structured settlement, you can use your money while it still has its full value.
Proceeds can be used to wisely purchase investments that protect against inflation. Many economists recommend real estate, gold, and investments like stocks, bonds, and mutual funds. For safety and inflation protection, Treasury Inflation Protected Securities (TIPS) provide a U.S. government guaranteed instrument that adjusts with the consumer price index (CPI), the government's measure of inflation.
When you sell your settlement payments, you can elect a partial or entire sale.
When you elect a partial sale, you retain future income and tax benefits. For example, an annuitant with 10 years remaining on his or her annuity could sell two years of payments in exchange for a lump sum. After two years, annuity payments resume. This option works great when emergency cash or debt repayment becomes a priority. It also can be used to raise funds for items like a house down payment or purchasing a vehicle.
When you choose to sell settlement in its entirety, you liquidate the investment. This option nets the highest lump sum payment possible. The caveat is that there are no more future payments. Nonetheless, in many cases, the benefits of using the money now far outweigh the future payments.
A lump sum sale provides the same benefits as a partial sale but gives you more control over the amount of cash you receive. As an alternative to selling a specific number of payments, you can sell a lump sum amount of future payments, such as $25,000. The $25,000 is then deducted from future payments.
Selling a structured settlement is a low cost, no hassle way to raise cash. Not only does selling protect against inflation, it allows you to use your money for what is important now.