structured settlement annuities
Structured Settlement:-Settlement is basically a reward that a defendant wins in case of winning a lawsuit. The term structured settlements means splitting this amount of reward into specific periodic payments. This settlement allows the payee to receive a certain fixed amount of money for every month or year over a specific period of time which can range from few years to decades.
Cash out Option (Lump Sum amount):-
In some cases, those who win structured settlements can sell their entire payments plan or some of their payments or portion of tier each payment for the benefit of receiving a huge lump sum. There are multitudes of companies that deal in business of purchasing these structured settlements from sellers. These companies are called as “Structured Settlement Factoring Companies” but in layman terms they are referred to as Structured Settlement Companies.
Factoring Discount Rate:-
The lump sum amount that a person receives against their structured settlement is always smaller than the amount that you will receive as per your periodic payment plan. The reason is because the value of such payments when compared to future is very small because of factors like Inflation and Interest rates. These Structured settlement companies apply this amount as a “factoring Discount Rate” to your whole settlement amount and pay you the remaining amount.
Reasons for selling Structured Settlements:-
People usually resort to selling their structured settlements as a result of mainly financial troubles. People generally find themselves in the following conditions where they opt to either sacrifice part of their structured settlement or whole of it.
- Unemployment
- Bankruptcy
- Medical problems
Tips to look for a structured settlement buyer company:-
When you are looking to sell your structured settlement in case of all options exhausted; do not be afraid to look around for varying options. The discount rate that is a factor that gives out the amount of lump sum against your settlement is not the same for all companies. Different companies will give you different options and you should go for the one that suits you best.
One other thing to consider is to look for the reputation of that certain Structured Settlement Company. You can check it by asking your State’s Consumer Protection Agency. The agency will provide you if there had been any regulatory action taken against this company or not.
Always verify the credentials of the company’s employee as well. You must ask the corresponding entities of the company about the authenticity of the people you are dealing with. Whether they claim to be the attorney of the company or the CPA of the company; check their credentials. Your lawyer can help you in this verification process.
Beware of the companies that charge for discount rate over 7%. Some companies can charge up to 29% of discount rate which will result in you losing thousands of dollars.
Do not go on to pay excessive fees for naught. It’s your money on the line so you should get the best deal out of it.
Continue reading..
One other thing to consider is to look for the reputation of that certain Structured Settlement Company. You can check it by asking your State’s Consumer Protection Agency. The agency will provide you if there had been any regulatory action taken against this company or not.
Always verify the credentials of the company’s employee as well. You must ask the corresponding entities of the company about the authenticity of the people you are dealing with. Whether they claim to be the attorney of the company or the CPA of the company; check their credentials. Your lawyer can help you in this verification process.
Beware of the companies that charge for discount rate over 7%. Some companies can charge up to 29% of discount rate which will result in you losing thousands of dollars.
Do not go on to pay excessive fees for naught. It’s your money on the line so you should get the best deal out of it.
Continue reading..
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