So You Want to Sell Your Structured Settlement Annuity
In this day and age since the great financial meltdown of 2008 many find people find themselves in difficult financial situations. Lack of gainful employment, inability to meet financial obligations, and an overall need for general cash liquidity are commonplace. And if you own a structured settlement, now is actually one of the best times to consider selling a portion of that structured settlement payment stream. Although the great recession caused tremendous financial difficulty for the average consumer, it also created a huge competitive market for sellers of such structured settlement payment streams as well.
For example, approximately 6 years ago, the average discount or interest rate offered to a potential seller was about 16 to 20%. However since 2008, and because of tremendous competition in the marketplace, an educated seller can now often negotiate much lower rates between 10 to 15%. While selling your structured settlement payment should always be your last option; if it is the only option to available to you in order to get the cash you need now, then taking advantage of the lower interest rates that currently exist is a very smart idea.
The main issue and fundamental problem with owning a structured settlement is that you cannot obtain a loan against your future structured settlement payment streams. Banks will not allow you to use a structured settlement annuity as collateral for a loan. And as a general rule you also cannot assign your structured settlement to another party unless you participate in a Court Approval Process. In fact, 48 states now have specific laws that regulate the sale and assignment of all structured settlement payments. Links to the various state statutes can be found at our website (Click Here).
So, how do you go about getting the best possible deal for your structured settlement knowing that you will also need to go to Court to get the sale approved? The answer is simple: Seek to retain the services of an Independent Professional Advisor to represent your interests and to act on your behalf not only to negotiate the best possible rate and amount you can receive for your structured settlement payments, but also to protect you and advise you throughout the entire Court Approval Process.
An Independent professional advisor is simply an attorney, certified public accountant, or other licensed professional (such as a Financial Advisor) that is both knowledgeable and experienced in the area of structured settlement sales. And every law that governs the sale of structured settlements specifically recommends that a seller obtain independent Professional Advice. In some states, it is even mandatory and you cannot even sell your structured settlement payment rights unless you have obtained Independent Professional Advice. Why?
The answer is simple; laws regarding the sale of structured settlement annuities are meant to protect the seller and state legislatures realized that every seller should (whenever possible) have an Independent Advisor. So, to make is simple for a seller to obtain an Independent Profession Advisor, most of the structured settlement protection statutes are written in way that allows the Independent Professional Advisor to seek to payment either directly or indirectly from the purchaser!
For example, in California, a purchaser must pay for the services of any independent professional advisor retained by the seller at no cost to the seller (See California Insurance Code Section 10134(f)). In other states, a well experienced independent professional advisor will generally seek to “indirectly off-set” any payment for their services so that the end result is still quality representation at in at “no cost” to the seller usually by negotiate a higher purchase price for the seller, which still results in a greater “net amount” to the seller (even with any fees) than you as a seller would have received otherwise had you participated in the sale process alone.
Remember all potential purchasers of structured settlement annuities will always have their own attorney and/or Independent Professional Advisor both representing and protecting their best interests. And since the main goal of every purchaser of structured settlement annuities is to seek to pay you as little as possible for your payment stream; in order to “even the playing field”, every seller should have their own Independent Professional Advisor to best protect their best interests not only in seeking to obtain the highest possible purchase price, but also to provide you with legal representation throughout the Court Approval Process.
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