An Overview Of Structured Settlement Factoring
Structured settlement factoring is the process of selling the rights to receive future amounts on a periodic payment arrangement. In many cases, it is recommended for individuals who get a judgment due to a personal injury case or other cash settlement to take the payments in a periodic form over several years or even a lifetime. The original settlement is known as a structured settlement and it has tax advantages and other benefits for both the payer and the payee.
If you have been working with a structured settlement and you determine that it is no longer working for your purposes, it is possible to sell the rights for future payments to a third party. You will receive the present value of the future payments as a lump sum. The major stipulation is that you must go before a judge who will decide if it is in your “best interest” to complete the transaction.
The term “best interest” has been widely interpreted so that the courts have a lot of leeway to approve a sale of the payment right of receipt. For example, buying a house, paying for an education for yourself or your children, and starting a business have all been approved in specific instances as being in the best interests of the individual.
Before deciding on a lump sum payment instead of periodic payments of your settlement, be sure that you choose the best company to handle the transaction. There are several characteristics that should be displayed by the purchaser The staff should be certified and experienced in the process. Most jurisdictions limit the ability to purchase or sell the periodic settlement. In practice, this means the buyer must know and understand the process for getting the payment change approved by the courts. You should look for a company that has been in existence for at least three years.
The company you choose should have a clean record with agencies such as the Better Business Bureau or other consumer protection agencies. The company should never have a default on its record and any complaints should have been resolved. The company should be able to get the transfer of rights accomplished in a timely manner.
Structured settlement factoring means some cost to you, since the company that buys the settlement plans to make money doing so. Many financial planners recommend against choosing this option, since there is risk. The individual who gets the lump sum should be very sure that they have the ability to use it wisely.
Tags:insurance,structured insurance,Structured Insurance Settlements