Did you receive a court settlement as a result of an accident, injury, or illness?  Are you now stuck collecting small monthly payments when you really wanted all of your money up front?  After all, the money is yours, right?  Why should you have to wait for years to collect all of it?

Well, the good news is that you do have another option.  Did you know that the structured settlement that you're receiving right now is a liquid asset that can be sold for cash?  Did you know that you can sell your structured settlement and receive a large lump sum of cash in return for it? 

Yes, it's true.  You don't need to settle for those small monthly payments any longer.  You can trade in those payments for a large cash payment immediately? 

Why would you want to sell your structured settlement?  There are many good answers to that question and the answer will vary from one person to another.  The bottom line is likely that you need money immediately.  You may have had to wait a relatively long period of time to receive your court settlement and you may have incurred numerous debts while you were waiting.  You may not have been able to work for a time and the bills may have accumulated as a result.  You may have incurred medical bills as a result of the injury or accident which earned you the settlement.  Those medical bills will need to be paid sooner or later.  It's even possible that you waited for your court settlement intending to pay off all of your debts, only to find that the monthly payments do not allow you enough funds to be able to do so.  Whatever the reason, you do have the right the sell your structured settlement.      

How does the sale of structured settlement work?  Essentially, a structured settlement involves a third party (the defendant in your court case) purchasing an insurance policy in your name, which pays you a pre-determined amount of money at specific time intervals.  For instance, your structured settlement may pay you $XXX.XX amount of dollars monthly, or quarterly, or yearly.  The details will vary depending on your individual circumstances, but the common denominator is a structured cash settlement paid to you, as ordered by the court or defined in a settlement, at a regular time interval. 

You may have heard, or even been told by your financial advisor, that you are not allowed to sell your structured settlement.  Strictly speaking, that statement is true.  You are not allowed to sell the actual insurance policy which was created in your name.  This insurance policy is the instrument which guarantees you that the payments will be made regularly, as promised. 

However, you are allowed to sell the right to collect the payments on that policy, which in essence, is what is referred to as "selling your structured settlement".  This is completely legal and is done relatively commonly.  You've probably even seen the commercials on TV and heard them on the radio.  There are numerous companies, both small and large, which will "purchase" your structured settlement from you.

What can do with the money you receive when you sell your structured settlement?  You can do anything you like with it!  It's your money.  You can use it to pay off medical or credit card debt.  You can use it to fund your retirement, purchase a new home, a new car, fund a college education, take a vacation, buy a business, start a new career, invest, play the stock market.  It's entirely up to you to decide. 

Is selling a structured settlement right for everyone?  No, absolutely not.  In fact, we urge you to consider your situation carefully.  Some people like the security of a guaranteed payment every month.  For some people, having their money come to them slowly over time makes it less likely that they will spend the money frivolously.  And selling your structured settlement will also involve accepting less than the full value of the settlement.

When and if you do sell your structured settlement, it is unlikely that you will receive the entire cash value of the settlement.  It is unusual for a settlement not to be sold at a discount.  There are a few reasons for this, but the most important of these reasons is what is known as the time value of money.  What this means is that the dollar you hold in your hand today is worth more than a dollar you may hold in your hand 10 years from now.  Some people call this inflation, some know it as the rising cost of living.  Whatever you want to call it, most of us are at least vaguely aware of the principle, even if we don't know it by name.  For instance, we all know that it costs more to go to a movie today than it did 10 years ago.  It costs more to buy gasoline today than it did 10 years ago.  It cost more to buy clothing or food than it did 10 years ago.  And it stands to reason that 10 years from now, it will be even more expensive to purchase these items. 

So, what does that mean to you in selling your structured settlement?  By selling your structured settlement today, you are exchanging dollars received today for dollars promised in the future.  And that's where the time value of money and the discount come in.  Let's say, for instance, that you were rewarded a total sum of $120,000 payable to you in monthly installments over the next 20 years.  You sell the payments awarded to you in your structured settlement for $100,000.  That means you will receive $100,000 today.  For you, that's a great thing.  But the person who just paid you that $100,000 has to wait for the length of the term to collect all of the money due.  This means that person has to wait for 20 years to collect all of their money back.  Twenty years from now, those dollars will purchase far less than the same amount of money would purchase today.  Are you beginning to see why the discount is applied?  (*Note: these numbers are only used as an example and are not meant to indicate what you might expect to be paid for your own settlement.)

Is selling your structured settlement right for you?  The truth is only you can answer that.  It will depend on your individual situation, your individual needs and your expectations. 

First Class Cash Flow Handlers buys structured settlements, as well as any other type of cash flow note.  For more information, visit our cash flow website, or call us at (401)-258-7158.