Structured settlements are designed to provide long-term financial resources, but if your circumstances change, selling some payments may be in your best interest.
Structured settlement annuities are excellent options in personal injury lawsuit cases because they are tax-free and guarantee income over time. However, structured settlement agreements are final and will not allow for unplanned changes. In these cases, many structured settlement payees choose to sell part or all of their annuity in exchange for a large, cash lump sum.
There are many reasons why a person may decide to sell a structured settlement annuity, including:
Paying Off Debt
High-interest debt, such as credit card debt, can quickly lead to low credit scores and impede future purchases.
Funding an Education
Both college and trade school can be very expensive. Most people take on the added debt of student loans when going to or sending their children to college.
Making Home Repairs
Homes require a significant amount of upkeep to maintain or increase in value. Remodeling, upgrading appliances or replacing the roof can all cost thousands.
Buying a Home
Depending on the area and the buyer’s credit score, a down payment on a home costs tens of thousands of dollars.
Starting a Business
Although a business can yield significant profits over time, new businesses require a significant amount of startup capital, and banks are often unwilling to give out business loans to first timers.
Investing in a business or stocks can yield high dividends and be used to fund retirement.
If back property, business or income taxes pile up, they can lead to bad credit, liens or garnishments.
How to Sell Your Structured Settlement
The CBC Settlement Funding team has more than 50 years of experience, so we fully understand the nuances of a structured settlement sale. To us, the process is best broken down into five easy steps.
Decide to Sell Your Structured Settlement Annuity
If you find yourself in a financial hardship or needing to make a significant purchase that will significantly improve your life, selling your structured settlement payments may be the right choice for you and your family. This is your legal right, following the court process. It’s crucial to establish your reason for selling before beginning the process so a judge can approve your reasoning and determine if selling your structured settlement is in your best interest before authorizing it.
Shop Around for a Funding Company
CBC Settlement Funding is one of many funding companies in the U.S. Our clients choose us because we have provided exceptional customer service, free quotes, competitive discount rates, and cash advances. Clients should also look for a funding company with a high Better Business Bureau rating — the BBB gives CBC Settlement Funding an A+ rating. We recommend each of our clients to compare quotes and companies before making a decision.
Begin the Structured Settlement Sale Process
Once you decide to sell your structured settlement payments to CBC Settlement Funding, your personal customer representative will review available options and assist you in selecting the best one for your needs. Our quotes are free and no-obligation. Should you decide to move forward with the selling process, our representatives will prepare the necessary paperwork for you to complete. The documents you will need to sign and file with our lawyers include your application, identification, annuity contract, settlement agreement and benefits letter.
Submit the Structured Settlement Sale Application
After you complete and sign the paperwork, CBC Settlement Funding’s lawyers will file them with the court. Over the next three to six weeks, the court will review the documents and set a hearing date. Keep in mind this timeline can fluctuate from state to state, as the laws governing the sale of structured settlements differ. CBC has one of the highest approval rates for these transactions in the industry.
Get Your Cash
Once the court reviews and approves the transaction, and a final court order has been received, you should receive your money within 48 – 72 hours. CBC Settlement Funding offers payment via electronic transfer or check.
Getting Advice From A Lawyer or Accountant
CBC Settlement Funding makes selling a structured settlement annuity easy, but the process is still a legal transaction. For this reason, we always recommend our clients confer with their attorneys before moving forward with an annuity sale. If you have an accountant or tax professional, we also recommend our clients seek advice from these professionals.
Your attorney or accountant can lend an extra layer to the proceedings, as they know your individual situation and can help ensure selling your structured settlement annuity is in your best interest. The nuances of selling annuities also vary from state to state, so your attorney or accountant will be able to answer any questions about selling your structured settlement in your area.
Sell Your Structured Settlement Annuity For Cash
We understand your personal finance needs may change over time, so CBC Settlement Funding is proud to offer you options that best suit your financial needs, including purchasing part of or your entire annuity for a lump sum of cash. If you’ve spoken to your lawyer or accountant and believe selling your structured settlement is the right choice for you and your family, call us today.
CBC Settlement Funding provides free purchase quotes, competitive rates, and in some instances up front cash advances within 72 hours. We make the legal process easy. We’ve been earning our clients’ trust with close to 75 years of combined industry experience and are proud of our A+ rating with the Better Business Bureau.
Length of Time Required
It’s very difficult to estimate how long it will take to secure your lump sum payment because selling your payments is a legal process. Each state law governing the sale of structured settlements is different, and this will affect the length of time required to complete the transaction. In general, however, the entire process takes an estimated 45 – 60 days.
CBC Settlement Funding
Selling My Annuity Payments: FAQs
The answer here is yes – and 47 states have laws in place regulating selling structured settlement payments for the protection of both the seller and the buyer. Three states – New Hampshire, North Dakota and Wisconsin – do not currently have any regulations governing structured settlement sales. However, it is still possible for residents of these states to sell their structured settlements to a funding company and have that transaction carried out under the laws of the state in which that company or insurance carrier is domiciled.
Settlement Agreement and Release documents from your court case stating the terms of the settlement and releases. These may be obtained from your attorney, insurance company, or from the courthouse where your case was argued or settled.
Annuity Contract and Benefits Letter from the insurance company issued on official corporate letterhead that lists your payment schedule. It may be necessary for you to make a written request to the insurance company in order to receive this.
Recent Check Stubs, Deposit Slips and/or Bank Statements to prove that you are receiving monthly payments.
If you were under the age of 18 when your case was settled, you will need to provide a copy of your Order Approving Minor Claim and Dismissal documents containing court approval, allowing you as an under aged person to enter into the settlement.
If the defendant’s insurer assigns its obligations to you over to a second party, you will need to provide Qualified Assignment documents.
For more information regarding a potential structured settlement tax, and legal impact of such a transaction, you should consult with a legal and/or tax professional.
When you sell some of your future payment rights for a cash lump sum payment, you are transferring the rights to those future payments to a third party otherwise known as a factoring company. This is known as a Structured Settlement Transfer (SST) or structured settlement factoring transaction.
A factoring company such as CBC Settlement Funding will provide the annuitant or payment recipient with cash today in exchange for a certain number of future payments. For individuals who find structured settlements too restrictive, having the flexibility of accessing their future money now is a viable option.
It is perfectly legal to sell some or all of your future annuity payments for cash. When it comes time to sell these payments, forty-eight states and the federal government has enacted additional consumer protection statutes establishing strict conditions when an annuitant sells some or all of their future payments.
Aside from the fact that you must be of legal age and of sound mind and judgment, the only requirements that the seller of a structured settlement or annuity payments must have is:
Evidence of the benefit through a settlement agreement or annuity contract
Proof of identity
Approval from the court
Other requirements for a structured settlement sale are set forth under the Internal Revenue Code. Beyond this, however, there are no particular requirements or qualifications that one must meet in order to engage in this type of transaction.
The present value is how much your future money is worth in today’s dollars. Think of it as reverse compound interest; where instead of determining the amount you would need to invest now in order to have a specified balance in the future, you’re looking at the future balance and determining the value in today’s dollars.
When you sell your future structured settlement payments to a factoring company, they will determine the present value of your payments using a mathematical equation. This equation uses number of years, interest rates as well as inflation rates to make that determination.
Not researching the company first– Do your homework and research the company before getting a quote. Check with your state’s Attorney General’s Office and look the company up on the Better Business Bureau’s website to see if they’ve had complaints about their business practices.
Taking a verbal offer – Get a concrete written offer. If the company won’t put it in writing go elsewhere. Reputable firms always give written offers.
Not reading your paperwork – Sometimes companies will hide their fees or other costs. It is important to know what you’re paying and why before you sign. If you don’t understand the wording ask or get advice from an independent third party.
Getting only one quote – If you don’t shop around you may not get your best offer. Don’t rush into a transaction with the first or only offer you receive.
Going with someone you don’t trust – If your representative gives you a run-around or won’t take the time to explain things, they may not have your best interest at heart. Go with a company that respects you and provides top-notch customer service.
Letting emotions cloud your judgment – Just because your financial situation is pressing doesn’t mean you should make hasty decisions. Do your homework and make an informed decision.
Not showing up for court – It is always in your best interest to go to court to explain your situation to the judge. Don’t let others determine your fate.
Consulting with an attorney or financial advisor about the sale of your structured settlement is a smart move. It also gives you a chance to ask questions and clear up any doubts you may have about the process.
The factoring companies that buy structured settlements often have legal professionals on staff. Still, just as you might seek a second opinion after receiving a medical diagnosis, you also should review documents or questions with your own attorney before committing to a structured settlement sale.
There is another reason to have an attorney involved. Regardless of the circumstances or the nature of the structured settlement, the transaction will need to be reviewed and approved by a judge in a court of law. A very good reason for this is that structured settlement transactions that are not approved by the court are subject to a whopping 40 percent federal excise tax.