Friday, September 24, 2010

Purchase Structured Settlements? What Are They, and Why Would I?

Purchase Structured Settlements occur when large sums of money are extended over numerous months or even years. Why do companies or parties create such a structured settlements. In the course of litigation, there may be a large settlement that is due to one party or parties. By expanding the payment over a period of time, there are some tax advantages, and for the party receiving the money, there is some assurance of future income. Contrarily, if you received an entire settlement in one, lump sum, there is nothing set aside for future income.

Now in ordinary litigation where there are serious personal injuries, these parties are going to have ongoing or future medical treatments. They will be in dire need of funds to pay for these future medical expenses. The structured settlement is perfectly suited for these circumstances. There may be some circumstances where the plaintiff has good cause for demanding the entire sum in one, full payment. They may have dual medical coverage, or they may not need future medical attention at all. They could simply want to pay off their mortgage or finish their education These are just some of the types of circumstances when a party may wish to have the entire settlement at one time.

If you previously agreed to a structured settlement, either by way of a lawsuit, an insurance annuity or even a lottery payout, this would be the time when you would investigate the possibility of having someone or some company purchase your structured settlement Of course these structured settlement buyers are not doing this out of the kindness of their heart. There are substantial fees associated with a purchase of a structured settlement.

One option you can consider is to offer to sell only a fraction (i.e. 50%) of your structured settlement to the buyer. This may be a win/win situation where you can get substantial sum of money up front, but you may still receive future disbursements as well, of course much smaller than your original structured settlement.

Another consideration is that the sale of your purchase structured settlement may need prior court approval. In some jurisdictions, the courts are acting on the behalf of injured parties to ensure that what you are considering is truly in your best interests. After all, you may be asking the court to get rid of a perfectly structured settlement that was established for your own protection.

Make sure that you allow yourself ample time to perform your own due diligence on the various companies the purchase structured settlements It is a very competitive area, and there are some smaller companies that offer what may seem as attractive terms. However, do not just jump at the first offer of cash for your structured settlements. Many of the big-named firms may have similar attractive terms or even better, but you'll never know if you don't spend a bit of time researching a handful of companies who specialize in the purchase of structured settlements.


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