Structured Settlement Basics – Selling Structured Settlement Payments
Owning a Structured Settlement Annuity (SSA) provides you with many benefits. The main advantage you get with this is that you and your dependents are financially protected in the long run by the structured payments of the settlement. Also important is the fact that these payments and the interest earned on them are not taxable, so you receive the full amount of the settlement over the term of the settlement. You can also sell your structured settlement (SS) payment in an emergency or for better alternative investments.
Under federal law HR 2884, you may be able to make a tax-free sale of your payments. In addition to federal law, the laws of most US states allow the sale of structured settlement payments. However, these laws force people to seek court approval when they sell their payments to stay tax-free.
You can easily get court approval to sell all or part of your SS payments and this requires convincing the judge of your true need for the funds. The judge will assess the reasons given by you for such a transaction and will approve or otherwise after making sure that the transaction is beneficial to you and your family.
If you are a sane adult and can prove that the sale of structured settlement payments is for the benefit of you and your dependents, the judge will have little reason to deny your request for court approval of this sale. Personal appearance during trial will go a long way in obtaining a positive verdict in your case. The sale of SS payments is possible without court approval, but you will lose the tax benefit when you sell them.
In most cases, the buying company you are working with may be interested in buying your payments. To complete the deal, they may have to do some legal work. They will usually do this at no cost; You are responsible for paying taxes on payments received if you are unable to obtain court approval.
The first and most important thing to do is ask for quotes. It is in your best interest to get quotes from multiple companies. Once you select the buying company whose listing you like, you need to send this company copies of the structured settlement policy. On the other hand, you will receive from the purchasing company an informative document for you to sign. This document details several clauses and conditions on which the sale is being made. You must sign and return the document.
The process for brief approval will begin after this. The time from start to finish of this process is around 90 days and this depends on the state of residence of you and your insurance company. In most cases, the money from the sale of the structure is disbursed in settlement payments within 10 days.