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Selling Your Structured Settlement

by jaggerstone

Selling a structured settlement is not difficult but does require
some research and thought on the part of the seller before
committing to the structured selling process. First, we must
define a structured settlement. A structured settlement is a
legal contract between two parties to compensate one party in the
contract a set sum of money paid out in installments over a given
period of time. Usually these contracts are formed and agreed
upon between the party that is being compensated and insurance
companies or other entities that are required to make the
payments.

Once the contract or sum is agreed upon, the party that is
required to make the payments begins making payments in monthly
installments. Often times these payments are made over years
requiring the payee to wait years for the total amount. In some
cases the monthly income is viewed as favorable by some. In other
cases, the total amount in one lump sum may work better for the
payee. Often, lump sum payment is not an option for the payee so
they are forced to take a monthly installment payment plan over a
set period of time.

Selling a structured settlement to an investor or company that
specializes in buying notes, or paper, is an option for people
that have been awarded structured settlements. In some cases,
people that have structured settlements may experience financial
difficulty or health issues that require them to liquidate their
structured settlement quickly. Loss of a job or other income
streams may be lost, prompting these people to sell their
structured settlement. Sudden illnesses such as cancer or heart
attack may cause long term disability and immediate cash is
needed to meet monthly expenses as well as medical bills.

There are other reasons to sell a structured settlement although
not as dire as the above reasons. Some people sell their
structured settlements to free up cash to take a long dreamed of
vacation. Others sell their structured settlements for home
improvements or to buy the dream house they have always wanted.
The reasons vary with some selling their notes to put their
children through college or taking the lump sum cash investing it
in other financial instruments to increase their return over
time.

It should be noted that when selling a structured settlement,
the total amount of the settlement will not be realized.
Structured settlement buyers offer to buy these notes at a
discount in return for lump sum cash to the payee. The settlement
buyer is assuming risk in buying the note with the discount
reflecting the amount of risk the buyer must assume. Many risk
factors must be considered by the settlement buyer including the
amount of the settlement and the financial worthiness of the
payor. Companies that make structured settlement payments are not
immune to insolvency and bankruptcy, so the buyer must consider
these factors before purchasing a structured settlement.

Selling a structured settlement is not difficult and only a
process that requires some serious thought and research.
Considering your needs and the reason for selling the settlement
should be foremost before initiating the process of selling your
structured settlement.

Phillip Hatley writes about many subjects in the financial
industry including futures trading and structured settlements.
For more information about structured settlements, please visit
his <a href="http://cash-flow-note.blogspot.com/">structured
settlements</a> blog.

Syndicated by Top Gazebos - www.topgazebos.net

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