What do you need to know to sell your structured settlement annuity?
A honest structured settlement annuity payment purchaser must be found.
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.
You should also consider checking to see if there are any lawsuits being filed against the company or broker. - contact your local Department of Consumer Affairs.
Talk at length with the company or broker, ask him / her questions and get a feel for how knowledgeable they are. Trust your gut feeling! Steer clear of those who promise much more money or can get it faster than others. If it sounds too good to be true, then it is.
Will I get my money in a week or two?
If you have been told that you can get your money within a few days ? do not commit! In fact, it may take a month and a half or longer depending on the following:
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. Have you dealt with Insurance Companies some are easy, most not so easy. It takes time to get the paperwork from them.
3. Different funding companies have requirements that make it important for your company or broker to know which company buys what. It saves a lot of time and you get your money quicker.
4. Check your Insurance Companies Rating? Make sure the Insurance Company has an A rating! Ultimately you will get a higher profit margin when your settlement is sold to larger financial companies. If a company has a lower rating then they may have to sell off settlements at a lower profit margin resulting in a lower price to you.
5. In addition to the above you will need the necessary documentation such as copies of the following: The annuity, the settlement agreement and release, photo ID, recent payment check and application. These are some of the things to consider. For now it gives you a good idea of what's required.
You must look at other sources like family, friends or a bank loan. The total amount of cash you will get from your structured settlement payments is not what you will get paid out if you sell your payments. If you wait for your payments than you will get that amount. But you are not waiting, you want your money now. Someone else is going to be waiting for these payments and they want a profit for waiting to get their money back. Profit range or cost is like credit card interest 8% and up.
Now that you have decided to sell your structured settlement you will need to take some things into consideration. Ask yourself? Is there going to be a tax consequence? As of January 23, 2002 a new law that governs such sales, does not impose any tax liability for selling a structured settlement.
When selling your structured settlement, think about selling only a portion 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 a structured settlement payment 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.
About the Author:
Frank ReCouper Sr. is President of FDR Resources and has been in financial services for over 45 years. For more information about Selling a Structured Settlement or Structured Settlements
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