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Cash For Structured Settlement Payments: Getting Cash Legally

Updated on July 17, 2011

Want to sell structured insurance settlements? It's not a well known fact until you get into the process of selling annuity payments, but there is a legal factor involved in getting cash for structured settlement payments. That legal factor applies to the vast majority of structured settlement sales, since most locales require court approval of structured settlement transfers. Understanding how to legally get cash for structured settlement payments puts you as a seller at the advantage of being able to know what to expect and spot a good (or bad) annuity buyer when you see one.

Where The Legal Burden Lies In Getting Cash For Structured Insurance Settlements Payments

The legal burden lies primarily with the buyer in structured settlement sales and transfers. It is not the intention of the courts to complicate or impede your access to cash for structured settlement payments; their only intention is to ensure that you are treated fairly and that the rights of private citizens selling structured settlements are preserved. The involvement of the courts is a state-ordered safeguard to keep buyers of structured settlements honest and fair. It is in no way a reflection on you as seller when you sell structured insurance settlement and you should not take it as such.

Your Structured Settlement Buyer's Legal Obligations To You

What the state and courts really want is to make sure that you are not taken advantage of when you sell structured insurance settlement payments. In an effort to protect your rights, most states and provinces require that an application and documentation packet be filed with the court ahead of time and that full disclosures—documented in writing—be provided with ample time for the seller to review them and seek the advisement of a third party. Such documents and disclosures must be provided and filed along the given schedule of the presiding law. There are a number of required disclosures the courts require for you and for them, including,

  • The discount rate applied to the arrive at the amount of the sale
  • The actual amounts of money you will receive (less fees and discounts—what you get when all is said and done) in cash for structured settlement payments
  • The number and amount of payments that transfer to the seller
  • The resumption of payments to you once the buyer's obligations are fulfilled

These cover some of the more basic legal requirements for getting cash for structured settlement payments, but there are other and more specific requirements that must be adhered to. In addition, the courts will require proof that the deadlines for disclosure were met, and contractual language absolving you from obligation if the buyer of structured settlements fails to fulfill their obligation to you.

Legally Sell Structured Insurance Settlement - Is Anyone Exempt From The Laws?

Some structured settlement sales are exempt from laws such as these, but only because of a lack of regulation in the state of residence. Not all governments require court approval to get cash for structured settlement payments. Most have adopted these measures, though, and of those that remain unregulated there is always the possibility of the law changing towards one of consumer protection such as these.

Even sellers who are exempt from legal approvals should consider these laws, though (the full text of which can be accessed online). Any state regulation governing structured settlement sales (and most states are nearly identical) will serve as an excellent guide for good practice for people selling structured settlements. So although you and your buyer of structured settlement payments may not be legally obligated to follow these procedures, it would certainly be in your best interest as a seller to hold your structured settlement broker to them. Whether by law or by informed consumer, good practice and open disclosures make for the most successful, fair, and profitable sales for getting cash for structured settlement payments.

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    • topwords profile image

      topwords 6 years ago

      Thank you