Top Five Snags in Selling Your Structured Settlement Payments
1. You Haven’t Done Your Research
- Try and talk to different factoring companies and get multiple offers. If you like just working with one company, then have them offer you different ideas for payment streams. Remember: these companies need your business to survive. The ball is in your court. The one thing you do not have any control over is whatever the current Federal Rate is that will determine how much you can get for your money. Otherwise YOU TELL THEM HOW IT’S GOING TO BE.
- Part of your research needs to be about the court process. Ask the factoring company’s attorney how long the court proceeding will last. Ask them if you can also read the documents they will be submitting to the judge on your behalf – so you can be on the same page as the attorney and the judge. Ask the attorney who the judge is and if they know the judge’s style. It’s your right to ask!!
2. You’re Selling Too Many Payments or You’re Not Selling Enough Payments
- If you’ve got $75,000 in debt you need to pay off and you need a new composite roof on your home, don’t raise $300,000. But don’t raise too little either. Sock away the rest for down the line in ten or fifteen years.
- Sit down and seriously write out what you think you need and stick to it – it’s a great idea to have a plan. The courts will be impressed. The judge will be asking you why you need to sell some or all of your payments and you’d better be prepared. This whole process will be uncomfortable, so get ready: you’ll be divulging your personal finances in front of complete strangers.
- Have a trusted friend type out your plan with double space in a word-processing program and have it printed out. Go to a FedEx Kinko’s or somewhere where a computer and printer can be rented for an hour. Make sure to include dates!
3. You’re Not Dealing with an NASP Member Funding Company
- Whose got your back? Non-NASP member funding companies have been known to: attempt to complete a purchase without court approval, WHICH LEAVES YOU WIDE OPEN TO THE IRS and other penalties. They have been known to sneak in provisions in the contract WHICH ARE AGAINST THE LAW – locking you into business with them, regardless if you want out or not.
- Going into business with a non-NASP member company could possibly sabotage any future dealings with court approval. The courts won’t even touch your case
4. You’re Responding To a Contract Sent to You In The Mail
- “What? It’s first class, it’s not a bulk mailing, they are addressing me personally, and not to just anyone, they know my case…” you say. News flash: they got your information because some funding companies review court filings. It’s public record. When they realize there is a pending purchase, they try to intervene.
5. You’re Actually Believing the T.V. Ads or Any Other Advertisements that Guarantee “CASH NOW”
- There is no “Cash Now”. Smarten up. The whole process takes up to 7 months, maybe more, depending on how diligent you are in crafting your plan, and how busy the courts are.
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