Making the Best Decision to Convert a Structured Settlement Annuity into Cash

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Making the Best Decision to Convert a Structured Settlement Annuity into Cash

It is important to have enough data to make an informed decision on converting your structured settlement annuity into cash.

It may be that you were awarded a structured settlement after a long and emotional legal battle. Now that you are receiving your payment on a monthly, quarterly or yearly basis, you might like to convert it into cash, and you may wonder if that is possible. In nearly every type of structured settlement scenario, you can.

However, before you take the first step in converting your annuity into cash, it is important to take the time to make an informed decision by gathering all the necessary data you will need. In nearly every type of situation, the process may take a few months to make its way through the legal system. Receiving cash immediately for a settlement is not how it works.

Why a Structured Settlement?

You may be wondering why you received a structured settlement plan in the first place, instead of just being paid all in cash up front. In the last couple of decades, structured settlements have become the preferred choice of many legal advocates that choose to settle their court ordered awards through an annuity instead of a total cash outlay. Oftentimes, annuities offer a better benefit because it can pay off the award over time.

Many attorneys and courts, along with defendants and plaintiffs, recognize the advantages of receiving a monthly payment to help offset recurring expenses as the plaintiff heals from their injury. Using a monthly payout through an annuity ensures that the injured party can remain financially secure in the future.

When Payments Do Not Work

While it might have seemed like a good idea at the time to receive structured settlement payments, to get a little money every month, the arrangement is not always beneficial. You might be receiving the monthly award and you may have bills that are higher than the amount you get each month. Having mounting debt and dealing with the stress of recovery from the injury might prove to be too stressful and diminish the healing process. In this case, you could be better served by selling some or all of your structured settlement payments and investing the money instead.

Following Government Guidelines

Although the United States government sets strict guidelines on structured settlement payments, they also recognize there are times when the payments are not practical for the plaintiff. Many courts allow the individual to convert their annuity in the cash to make their financial situations more comfortable. The guidelines they set in place have been established to ensure the injured party is protected and not hindered in the process.

Locating a Buyer

Researching and locating a buyer for a structured settlement annuity is similar to searching for any service that buys and sells trading instruments. It is essential to seek out companies that have a positive financial reputation. Locating reputable purchasers of structured settlements can often be found through online research and personal referrals.

There are valuable Internet resources available to help injured parties locate trustworthy structured settlement purchasers. Many times, attorneys offer recommendations too. Once a reputable company has been found, it is important to ask lots of questions and carefully listen to their expert answers. It is essential that anyone purchasing a structured settlement payment follows all the rules and regulations of your state.

Negotiating Terms

After a competent, reputable buyer who is willing to purchase the annuity has been found, it is essential to negotiate the best terms. This will require you to read and listen carefully, to ensure you fully comprehend the terms. All questions should be answered. Only then will you have enough data to make an informed decision as to whether or not you should convert your structured settlement payment into cash.

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