What Mistakes Should I Avoid When Selling a Structured Settlement?
Are you thinking of selling a structured settlement?
A court-ordered structured settlement is designed to help you with your costs and compensate for negligence. The problem with them is they can be over a long period of time.
This is good for your financial future normally but sometimes unexpected things like emergencies or surprise medical expenses happen. Selling the settlement enables you to get most of the money upfront.
When selling a structured settlement, take your time to think through all your options and don’t make these common mistakes.
Not Understanding the Selling Process
Selling a structured settlement, either in part or in whole does not happen quickly.
The insurance company and the courts have to give approval especially if the case is a lawsuit litigation settlement and all of these processes take time.
Settlements can take anywhere from thirty to ninety days, so don’t expect to get your money too quickly. This is built into the process so people don’t get taken in by fraudulent practices.
Not Seeing Structured Settlement Amounts
Structured settlements will usually be to buy a certain amount of your payments. The more payments you sell the more you will get.
The thing to understand is you won’t get the entire amount. The person buying the settlement is going to pay you less than the entire amount so they make money in the process.
You also want to understand that there are transfer costs involved for things such as paperwork and lawyer fees. Make sure you ask about these so you aren’t surprised when those fees are taken out of your settlement.
Not Getting Other Offers
The best structured settlement happens when people shop around and don’t just go with the first offer.
You want to check with companies and compare rates and costs involved with the settlement.
You also want to check a company’s rating, like the example here. Some companies will prey on people who have just been through a settlement, so you want to be careful and check around before making any decisions.
Not Understanding Tax Issues
Money from settlements is paid from the liability insurers tax-free. Settlements that you sell may have different rules when it comes to taxes.
Where you live and your age could have a bearing on any taxes that you may owe on money from a structured settlement.
You want to check with a local CPA to make sure that your settlement won’t have any negative tax consequences.
The Next Steps
The stress of going through lawsuit litigation is hard enough and you don’t want to add financial stress to the situation. Take your time when looking into a structured settlement. List out the pros and cons of selling all or part of the settlement.
Then make sure to only talk to reputable companies. If someone solicits you and pressures you to only work with them, stop talking to them and protect yourself.
For more help on financial issues, check out our other articles. Our passion is keeping you up to date and informed.