Selling your Structured Settlement
Owning a structured settlement annuity gives you a lot of benefits. First of all, you and your family/ dependents are made financially secure for a considerable amount of time because of having structured settlement payments and these payments including the interest earned on them are tax free. It is legal to use this money either for any impending emergencies or for an investment with high yielding returns.
Your structured settlement payments can be sold without attracting any federal taxes and this has been approved as per federal law HR 2884. In addition to federal laws, more than two-thirds of states in the United States allow the sell of structured settlement payments. The most important thing in this is that in both the cases the sale has to approved by a court.
Selling Your Structured Settlement
In case you are in a position to convince the judge about your actual requirement of funds for your use it is not all that difficult to sell all or part of your structured settlement payments. The presiding judge will go through your case and give his judgment based on whether this sale will be in you and your family’s interest or not.
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. In order to improve the chances of your getting court approval it is advisable for you to attend the court in person on the day of hearing. 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.
The purchasing company with whom you are having discussions might be interested in purchasing your structured settlement payments. They take the responsibility of doing the necessary legal work to ensure that the sale finalized. It is unlikely that they charge you for this effort; however, one thing you have to keep in mind is that the amount you receive is taxable without court approval.
First, you must get quotes. It is always beneficial for you to get multiple quotes. You should send copies of the structured settlement policy to the purchasing company whom you select after running through various applications. A disclosure document will be sent by the purchasing company asking you to sign. This document contains the clauses and conditions of the transaction. This should be signed and returned after your checking.
The court hearing will be the next step in this process. The state of residence of the seller and buyer decides on the duration for completion of this process and normally it may take up to 90 days. After receipt of court approval it takes 10 days to receive your money.
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