Selling your Structured Settlement Payments

Selling your Structured Settlement Payments

The advantages one can get from having a structured settlementannuity are quite a few. Structured settlement payments are advantageous in providing financial security on a long term basis for you and your family and the payments as well as interest earned are free from taxes. In case you need the money for any emergent situations or you find that you can invest this money in a better way you are entitled to do it as per law.

According to federal law HR 2884, you have the right to sell your structured settlement payments tax free. ) About two-thirds of the states in the United States also permit sale of structured settlement payments. In order to become eligible for selling this without paying any taxes you should get the prior approval of the court.

Selling Your Structured Settlement

It is fairly easy to be approved in court for the sell of all or part of your structured settlement payments, as long as you can prove that there is a need for the money. The approval or otherwise will be given by the judge after reviewing your case to decide whether you require this money for a transaction that will benefit you and your dependents.

The judge might not refuse court approval for selling your structured settlement payments if you are an adult with a sound mind and also if you can prove that this sale is beneficial to you and your family. Keep in mind that appearing at the hearing may help your cause. You can sell your structured settlement payments even if the court does not approve of it; however, this will deprive you of the tax free status for this payment and its interest.

In all probability, the purchasing company with whom you have been discussing might be willing to purchase your structured settlement payments. To facilitate finalization of the sale they will handle necessary legal formalities. They will not charge you for this extra effort they have taken for this; however, in the absence of court approval, you are liable to pay taxes on the money you receive.

First of all you must get quotes from various companies. Getting quotations from a number of companies is advantageous to you because it will give you a chance to select the best among them. If you like a quote that is given, you will send in copies of the structured settlement policy to the purchasing company. You will receive from the purchasing company a disclosure document which you are expected to sign. This document contains the clauses and conditions of the transaction. You must sign and return after you go through the document thoroughly.

The court hearing will be the next step in this process. Under normal circumstances this takes up to 90 days and this depends on your state of residence and your insurance company. In most cases, once you are approved, you will receive your money within 10 days.