Understanding How Structured Settlements Work

A structured settlement, also known as periodic payments refers to a negotiated insurance or financial arrangement that allows a claimant to resolve a personal injury claim or any other civil case by receiving part of the compensation through periodic settlements on a schedule agreed by both the claimant and defendant. Instead of getting a lump sum payment, the claimant receives a series of payments over a given period. As such, the claimant has a definite income stream either monthly, quarterly or years, depending on how the payments are structured.The person at fault outs the payment towards an annuity from some life insurance company.

People may receive structured settlement because of a number of reasons including wrongful death, personal injury and worker’s compensation. The family of a person whose death is subject to a claim of wrongful death may receive compensation through a structured settlement. A personal injury case, where a person files a lawsuit against people believed to have been responsible for the injury, may also qualify to receive structured settlement. The money helps the claimant pay for medical bills and other related costs. Worker’s compensations help recipients pay for medical treatment as well as replace their wages.

Selling a Structured Settlement

It is legal and possible for one to sell his or her structured settlement payments.

If one has had a major shift in life, selling out a structured payment may be an option to help get the money in lump sum. People normally sell their structured settlements for various reasons, and the decision to sell is greatly personal. Some of the reasons people may consider selling their structured settlements include:

  1. Purchasing a house
  2. Protecting a house from a foreclosure
  3. Paying debts
  4. Paying for college fees for themselves or their loved ones
  5. Starting a business or growing a current business

However, the list is endless as one. Basically, one is need of the money now as opposed to getting it in small amounts spread through a given period.

The process of selling a structured payment is usually simple and begins with making the decision whether it is wiser to receive the money in lump sum as opposed to a structured payment. Then you will decide how much you want to sell, as you can sell the whole amount or part of the settlement. Choose the company you want to sell your settlements to before asking a judge to approve your request. You may get part of your cash in advance before the judge approves your request, but in case the request is not approved, you will have to pay back.

The Best Structured Settlement Funding Companies To Work With

Best Structured Settlement Funding Companies

A number of buyers of structured settlement rights, offer to purchase part of or the entire amount of a structured payment right in exchange of a lump sum cash. Such buyers, also called structured settlement funding companies help in facilitating the transfer of structured settlement rights. For instance, a payment stream of 30 years may be transferred for a single payment right now. However, the single payment will be lesser valued. Always consult your legal adviser to ensure that you properly understand the company’s term. You will also require the approval of the judge, in a court, before you transact because the enforcement of the approval is not guaranteed.

Although you have the legal rights and it is possible to sell structured settlement payments, deceitful companies may attempt to prey on your financial need as a seller. As such, you need to be careful before choosing a company to transact the transfer of your structured settlement rights.

One of the signs of a dishonest company is misleading behavior, for example saying one thing but putting in writing a completely different thing. You should also be careful with a company that rushes you into signing something that you do not understand. A buyer that asks you to misrepresent yourself or give false information about yourself in writing, is not credible to work with.

Go for a company that offers personalized services and uses a representative to offer the service as opposed to transacting on an automated system. A genuine company will also give you ample time to understand their selling process as well the sales agreement.

Some of the top structured settlement companies are JG Wentworth, Olive Branch Funding, and SenecaOne.

Among its several services, J.G Wentworth Company provides structured settlement. The company is at present publicly traded on the OTCQX. The company is highly reputable when it comes to selling your structured payment in exchange for a huge sum of cash. Their website has a quote request function to enable you get an approximate estimate of what your lump sum should be. They usually retain between 9 and 15 percent and this includes all fees. However, the bank has just been out of bankruptcy, and if again declared bankrupt, it may be difficult to get your cash.

Apart from buying structured payments, lottery winnings and buying annuities, Olive Branch Funding does not offer other financial products. Given that the settlement process may be quite complex, Olive Branch Funding can give you a cash advance, which is usually about 20 percent. You receive the advance within 72 hours. However, if the judge does not approve your sale, you must repay the advance. Its website does not have any information regarding its discount rates or fees. You will have to contact the company for you to receive such information.

Seneca One Finance offers financial services for lottery winnings and structured settlement funds through its subsidiaries: Freedom First Capital, Lump Sum Capital and Seneca One. The company is very reputable and it offers advance payments to some customers. Its structured settlement service is separated from contest or lottery winnings, ensuring that you get services promptly.