A structured settlement is an innovative way of compensating personal injury victims. The compensation is agreed between the plaintiff and the defendant in a lawsuit. In this agreement, the injury victim does not receive his or her money as a lump sum but rather as a stream of income. This income is meant to meet future medical and personal needs of the victim. The structured settlements are now part of the common law for several countries. This includes the US, Canada, Australia and England. Under certain conditions, structured settlement payments can be tax free but in some cases it may attract income tax. In the US, structured settlements became part of the law in 1982 when the congress passed the Periodic Payment Settlement Act. This mode of compensation can be agreed between the parties in a lawsuit or can be ordered by the court. The court’s order is a common occurrence especially in cases involving minor victims or incapacitated adults.
Selling A Structured Settlement
The beneficiary of a structured settlement may choose to sell part or whole of his or her negotiated structured settlement. This however has to comply with the internal revenue code 130 whose intend is to prohibit any modifications to the payments. The structured settlement factoring companies will therefore offer to pay the claimant lump sum money in exchange of the payment rights of the negotiated settlement. This sale will generally require an approval of a judge so as to ensure it is in compliance with the structured settlement protection act. The process of selling a structured settlement is known as structured settlement factoring transaction. It basically involves the following four steps:
- Identifying the right factoring company
- Getting a quotation and understanding the discount rates and the discounted present value
- Signing a contract and obtaining your cash
- Registering the transaction with a judge
Before reaching a decision to sell your agreement, you ought to be absolutely sure that it is in your best interest. Some of the reasons that cause people to sell their structured settlements include:
- Purchasing a home
- Paying for the child’s education
- Paying off a debt
- Investing in your business
There are several laws that have been put in place to protect your interests when you choose to sell your agreement. This includes a right to know all the details pertaining the sale agreement. These details must be put in writing and agreed upon by both parties.
Choosing the right structured settlement factoring company
Having made up your mind that selling your agreement is in your best interest and that of the entire family, you now need to choose the right company. The right company will ensure you get the most out of your agreement. This includes the cash you receive, how fast you receive it and how pleasant the process will be. We review some of the best companies you many consider for your structured settlement factoring process.
- J.G. Wentworth
This is one of the best companies that you can visit to get quick access to your structured settlement cash. The company is one of the largest in the US and has helped thousands of customers access more than $8 Billion of what would have been their future cash. Some of the products they offer include structured settlement payments, personal loans, prepaid cards and mortgage loans. J.G. Wentworth can connect their clients with pre settlement companies to get them money before even the trial is over. Once the court has made a determination, J.G. Wentworth can buy all or part of your settlement for a lump sum. All future payments related to lottery winning, leasing of land and inheritance can also be handled by J.G. Wentworth.
- Olive Branch Funding
Olive branch company also provides cash solutions to persons requiring access to their future payments today. These payments include structured settlements, annuity payments and lottery awards. The company is known for its customer friendliness and personalized tailored plans to suit your goals. Their representative will offer you a personalized consultancy service to design the payment plan that suit your needs. In case of a structured settlement, once the judge has made a ruling in your favor, you can access your lump sum immediately.
SenecaOne is a trusted financial partner for solving your immediate financial need as well as offering a long term solution for your future payments. SenecaOne takes a personalized approach in assisting their customers meet their long term financial goals. The company is also a member of NASP (National Association of Settlement Purchasers) and hence ensures fairness, competitiveness and transparency in the market place. Since 2002 when it came into operation, more than 1000 lottery winners have been assisted to access over $575 million of their future payments. It also offers one of the best progressive advance payments program.