If you have won or settled a personal injury lawsuit and have as a result received an award, you have the option to take this award as a one-time lump-sum payment or as a structured payment.
If you choose to receive a structured payment and need some cash now, all you need is to “cash out” the settlement. In other words, you will need to sell all or a part of your future payments in exchange for a lump-sum.
How Does Selling a Structured Settlement Work?
When you decide to sell your structured settlement, there are several important steps to follow. This is also a legal procedure, which means you must follow the set process.
First things first, you need to find a buyer who is ready to purchase your settlement. There are many structured settlement purchasing companies out there so it’s important that you do your homework to ensure you find the best.
The aim is to find a company that will ensure you get maximum value from your settlement. In this case, find a company that offers a low discount rate (a low discount rate means a high payout).
You also need to consider the surrender fees or charges. These are charges imposed by the company that owns the settlement payments. They include legal fees, broker fees, and other fees associated with the sale of the settlement.
The company’s reputation should also be a priority. There are many slick companies out there whose only intention is to rip you off. Always go with recommendations or better still, do your homework thoroughly.
Will the Court Approve my Request to Cash Out my Settlement?
As stated earlier, the court may have to approve your request to cash out your settlement.
However, this is not a case where the judge simply signs the documents and outrightly approves your request. You must convince the court that your reasons for selling the settlement are genuine.
Some genuine reasons include paying off medical bills, repaying debts, funding college education, purchasing or repairing your home, including others. However, in cases where you simply want the cash to pay for a luxury vacation or invest in a get-rich-quick scheme, the judge may decline your request.
How Much Money Will I Receive After Cashing Out My Settlement?
There is no definitive answer to how much you will receive as it may depend on various factors such as;
- The total payment amount
- Your reasons for wanting the cash now
- The discount rate
- Your future financial needs
- Your state
- The structured settlement purchasing company
- The size of settlement you intend to sell
- Your health and age
So consider these factors before selling the settlement to avoid problems later on.
When Will I Get the Money After Cashing Out My Settlement?
How long it will take to receive the cash may depend on various factors such as the state you reside in, the buyer, court approval, including others.
In most cases however, it takes approximately 30 days or even more.
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