What do you need to know to sell your structured settlement annuity?
A company or broker has to be found, who deals with the sale of structured settlement annuity payments.
Find out how long the company or broker has been in the structured settlement industry. Given the level of difficulty in the industry, the company or broker should have a solid background.
Go to your local Department of Consumer Affairs to see if there are any lawsuits being filed against the company or broker buying your settlement.
Engage the company or broker, ask questions, lots of them. Find out if they seem to know what they are talking about or at least bright enough to get back to you with answers. If you feel you are being double talked or they can do everything better than anyone else, look for someone you feel you can trust.
Will I get my money in a week or two?
This is a complicated process it will take one and half to four months to get your money. Anyone who says faster, run don’t walk, because they are not being truthful.
1. A Court Order is required. It is now required by all states for a court order to be issued. If there is no court order, a tax equal to forty percent must be paid on the total amount of payments being sold. Do not fret, this is a good thing ? it makes selling your settlement a little safer.
2. The Insurance Company ? This includes both the issuer and the owner of the annuity. These things do not happen overnight. It takes time when dealing with companies.
3. What kind of payments do you have (quarterly, semi, annual, or are they a lump sum)? Different funding companies have their own requirements and it’s critical for your broker to know these requirements. Do your homework on the company or broker you choose – you will get your money faster and with a lot less hassle.
4 Price for your payments may depend on the rating of the Insurance Company holding your annuity. A company with a lower rating may get less because the profit is lower to the investor.
5. Necessary documentation: Copy of the annuity, the settlement agreement and release, photo ID, recent payment check , any child support payments out standing and application for selling payments. A honest expert can help you gather these documents.
What will Cashing Out Cost Me? Most likely you are going to be some what disappointed in the amount you receive. Total up all the remaining payments and know that cashing out will offer you much less than that. They based the structured settlement on a certain amount of money put into an annuity and then that principal amount, plus interest paid out, equaled the settlement amount. Consider other options before selling your payments.
You have decided to sell your structured settlement and some questions to ask yourself. What about taxes? As of January 23, 2002 a new law says no tax liability for selling a structured settlement.
Another thing when selling your payments, is selling only a portion. Sell the payments that will meet your current needs, and leave the rest in an annuity so that you will still receive some sort of monthly income. A financial emergency or other unexpected expense may come up requiring you to access and sell your structured settlement payments in the future .
Know that your settlement was meant to be used over time and selling it now can leave you with money problems down the road.