So you have a quote to sell your structured settlement, and you are waiting the appropriate 10 days before you sign and return the purchase agreement. As you talk to friends and family you do not fully understand how they come up with the present day discounted value, or be able to explain this to your friends and family.

Well this is where i could go off on a tangent and start spouting formulas and equations that mathematically make sense and prove the numbers are true and correct or inflated. But these same calculations have been known to confuse even the judges presiding over these matters. So don’t get discouraged, and in fact that is exactly why i am not going to go into them here. I personally prefer to use a specialized piece of software to do the math as it were, just because it is so complex.

A simple analogy is if you buy a cheeseburger today, that same cheeseburger did not cost the same 20 years ago and more than likely will not cost the same in 20 years. in fact the dollar today is not going to hold the same value in 20 years.

The IRS has even given us a number and continue to update that number as to what a dollar promised in 10 years is worth today. That is the present day value. Then there is an allowable discount rate that can be applied and that varies from company to company depending n their present day cost of money. This is also where you can “negotiate” the price of your structured settlement transfer, and why certain companies have better prices than others.

Now the Judges are supposed to ensure that these rates are fair and equitable. Also ensuring they are not what is called Usury rates, which is simply excess interest rates. Much like a credit card can not charge you more than 19 – 20%.

Selling your Structured Settlement