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Access to Cash: Structured Settlements And Your Money

Updated on July 16, 2011

Being in financial need is a frustrating thing. What compounds that frustration is to have money owed to you, 100% rightfully yours, and not be able to access it. This is the difficulty that multitudes of structured settlement recipients face—unnecessarily. If you are collecting money from a payment agreement, and are in need of cash, structured settlements can be used to access the money you need.

Some Call It Selling (for cash) Structured Settlements…

…And some call it transferring structured settlement payments; some even call it a structured settlement loan, although that is really a misnomer (because you do not pay back the money that is paid to you, you simply exchange payment rights for a larger sum of cash—and there is no interest involved).

By any name, the process for accessing cash from ongoing structured settlement payments is basically the same. This is a (fully legal) method by which you work with a third-party investor (a structured settlement buyer, sometimes referred to as a structured settlement broker) who buys settlement payments at a discounted rate and in exchange turns over to you a large lump sum of cash. Of course, that is an oversimplification of the process, but that is in essence what occurs. The details of the sale or transfer are largely dictated by you, worked out with your buyer.

Working Out The Details of Cash Structured Settlements

As each individual's needs are unique, each individual's structured settlement sale will be unique, too. The factors that impact most heavily on these details include:

  • Your plans for your cash and your reason for seeking a structured settlement payment sale.
  • The amount of cash you want to collect—the lump sum that you will receive once the discount rate and fees are applied
  • The number and amount of payments remaining on your agreement.
  • Whether you want to exchange all payments once, or reserve some or a percentage of your payments.

As the seller, you do have options available to you.  You do not have to sell all of your payments in order to access cash from structured settlements.  Nor do you necessarily have to stop receiving payments at all.  Buyers are willing to work with you to build a sale agreement that is suitable for both of you.  That may mean selling all of your remaining payments and collecting a larger, final lump sum; it may mean reducing the amount of your regular payments, getting a lump sum of cash, while still receiving smaller amounts monthly; or it may mean that you get a large lump sum of cash now, stopping payments for a time, and resuming them after your obligation to the buyer is fulfilled.

Whatever the details of the agreement turn out to be, do know that it is your right to have them fully disclosed to you before you are under any obligation to the buyer.  In most places, open disclosure is the law.

Personalize Your Cash Structured Settlements Plans

Whatever agreement is reached, it should be of benefit to you. It should (within reason) achieve the end you have set out for, and gain the access to cash you need. The laws and the flexibility of structured settlement transfers are on your side as the payment recipient. What's more, there are many eager investors out there willing to work with you towards those goals; so as the old saying goes, if at first you don't succeed, try again. This is an industry like any other with upstanding players and less scrupulous dealers—and competition within the market. You have nothing to lose, and much to gain, by talking with a few well-recommended structured settlement buyers to see who is most capable of offering you the best deal going, with the most equitable and profitable access to structured settlement cash.

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    • topwords profile image

      topwords 6 years ago

      Here's what I keep around. I do not think that needs it, but who knows.

      Thank you.

    • Julie-Ann Amos profile image

      Julie-Ann Amos 8 years ago from Gloucestershire, UK

      "A what if question, what if you are taking payments and in todays world where bankruptcy is common, the settlement company paying you goes belly up? Regards.."

      I guess you're in the same boat as if the financial institution paying you your structured settlement went belly up!

    • Pete Maida profile image

      Pete Maida 8 years ago

      This is information that I will keep around. I don't imagine having a need for it but who knows.

    • ethel smith profile image

      Eileen Kersey 8 years ago from Kingston-Upon-Hull

      Too many financial nightmares these days

    • rb11 profile image

      rb11 8 years ago from Las Vegas

      A what if question, what if you are taking payments and in todays world where bankruptcy is common, the settlement company paying you goes belly up? Regards..