Structured Settlement Money:Your Options With Your Money
When structured settlement money is being paid to you, you have options. This comes as a surprise to many people receiving structured settlement payments because the arranging and contractual phase of the annuity award is done at the time your case (or sometimes winning) is settled. Nevertheless, even after the dust has settled and annuity payments have commenced, you do have options with your structured settlement money.
Your Options For Structured Settlement Cash
When you are receiving payments from a structured settlement, you have several options. Those include
- Keeping all rights to all of your annuity payments and collecting the full amount of payments over time (which usually means years)—this is a good option as long as you do not have an immediate, pressing, or upcoming need for more cash and you are living comfortably on the payments as they are currently being made.
- Working out a structured settlement transfer to advance structured settlement annuity payments—this is often the best option when unforeseen expenses arise, or when you need a large lump sum of cash to get back on your feet after settlement.
You might have noted that what is not included on the list above is a structured settlement loan. The reason for that is that structured settlements cannot really be used as collateral for a loan. You may be able to get a bank or lender loan at a rate of interest to be determined based on your annuity payments as income (perhaps not—that's for the lender to decide), but lenders do not consider future, yet-to-be-collected structured settlement payment rights to be adequate collateral for a secured loan.
Given this, the two listed options are the basic choices for people who receive money from structured settlement annuities. As mentioned there are several options overall; when you choose the latter, you have more options that open up to you.
Structured settlement buyers generally have a lot of flexibility, and therefore a lot of contract options to offer to you. Those are options that you can negotiate with the buyer so that you get the most benefit from the transfer and access to structured settlement money. You will need to keep in mind that the structured settlement buyer is looking for a benefit, too, but that first and foremost in everyone's mind should be structuring an annuity transfer that fulfills your financial needs.
Options Within Options With Structured Settlement Money
The widest options open up to you when you decide to sell structured settlement payments. That is not necessarily advice to do so, simply a statement of the facts; you still need to decide what is in your best interest between the two basic options.
When you do decide to access structured settlement cash you will begin to work with a representative of a structured settlement buyer. These are people or entities who purchase structured settlements as investments and buy your payments for a lesser amount (lesser than what you would collect if you waited to collect all the payments on schedule yourself). In return the buyer will give you a lump sum of cash that you can control and spend now. That lump sum will be based on your financial needs—how much structured settlement cash you want access to now.
Those needs should also take into consideration your future income needs. That consideration will help you determine what type of agreement to negotiate with structured settlement brokers. The usual options here include
- Selling all future payments for one lump sum of cash. You will no longer have rights to any future payments; all will be paid to the lender, and you will get one large sum of cash once.
- Selling some of your payments for a large lump sum of cash (the most common arrangement). You get the amount of money you want or need, and the investor collects a specified number of payments to collect their investment, and then no more. Once the obligation to the structured settlement buyer is fulfilled payments will be made to you directly from the annuity again.
- Selling partial payments for a lump sum of cash. Again, you receive an agreed large sum, but instead of getting no payments at all for a period of time both you and the annuity buyer will get partial payments until the buyer's obligation is fulfilled.
- Full or partial payment transfer in exchange for two or more larger payouts from the buyer. You will be paid as agreed in two or more larger lump sum payments and the investor paid as agreed.
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