Structured Settlements – Frequently asked Questions About Structured Settlements

Structured settlements often leave people having many questions.  Although structured settlements are frequently used in our society, to many people do not know much about them and do not understand them.  This leaves people asking many questions about the structured settlements. 

We will explore some of these frequently asked questions and do our best to answer those questions about structured settlements with hopes that you will be better informed.

Why do companies want to buy structured settlements?

Structured settlement companies purchase structured settlements at a profit from the individual who was awarded the settlement.  Most of these companies will take the profit that they make off of structured settlements and reinvest in to their portfolio.  In turn what is left is also used to pay employees and pay for advertisement to draw in more structured settlements.

When considering selling a structured settlement make sure that you choose a financially healthy structured settlement company.  That way you will not have to worry about the company going bankrupt.  A financially healthy company will be able to offer more for structured settlements.  They also will be able to take and pay you out of cash flow instead of borrowing from banks or other financial institutions.

Companies are drawn toward structured settlements because of taxation and because of a safe cash flow.  There always people who are in need of quick cash and are willing to sell their structured settlements to get it.  The hardest work for the structured settlement buyers is the marketing and getting court approval to purchase the settlement.

Is selling structured settlements a good investment decision?

Most of the time selling structured settlements is not a good investment decision for you, but is great for the structured settlement buyer.  When selling your structured settlement is possible to lose up to half of the value of the structured settlement that you possess.  That is quite a loss. 

You also have to look at the fact that you will have a regular payment coming into your household that is tax free.  If you sell that structured settlement taxation may become an issue.  You may end up owing state and federal taxes at the time of the sale.  In other words, that means more money out of the amount that the purchaser pays to you.  That is a loss to you.

Can I sell my settlement?

Yes you can sell your structured settlement or structured settlements.  You will find that there are many structured settlement buyers who are more than willing to buy your structured settlement.  Do your research on the companies.  Choose a couple reputable companies and compare the offers they give you. 

Do I have to sell all of my payments?

You do have the option of selling only part of your structured settlement and keeping part of it for future payments.  It basically would depend on what you need the money for.  Maybe you have had a health issue and you need money to pay hospital bills.  Then you would only need to sell enough of your bills and maybe to live on until you can get on your feet.  You do need to remember that you will probably be taxed on the part that you sell, so you might want to draw enough to meet that need also.

Can I sell my structured settlement in parts more than once?

Yes you can do more than one transaction on your structured settlement.  Many people do this when they do not plan well for the money that they have drawn out the first time.  Also unforeseen instances happen and it leaves one in need of more cash quickly.  It can be done, but it is best to try to plan well for the need at the time and for anything that you think might come up in the near future.

These questions are the most frequently asked questions about structured settlements.  Hopefully we have given you some useful information that will help you along the way should you decide to sell your structured settlement.  The best piece of advice that we can offer anyone who is looking into selling a structured settlement is to do your research.