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How to Guide: Selling Your Structured Settlement
Structuring your settlements are a great option for those who like keeping to a strong payment schedule. Getting regularly scheduled withdrawals is not only responsible money handling but can work on boosting your credit score. However, life in unpredictable and you may need to sell your settlement to help yourself with either short term or long term situations. The most common reasons people sell are:
- Personal business finances
- Paying off medical debt
- Making student debt payments
- Downpayment on a new apartment or home
Whether you need to sell for profit or to sell for personal assurance, we will go over the different ways to sell, how to sell, the average time it takes to sell, and how much money on average you will receive.
Different Ways to Sell
Believe it or not, there are many ways to sell your settlement. This includes partial, entirety, or a lump sum sale. When you sell your settlement partially, you of course only sell a portion of it. This is the most popular way to sell because even though you sold a part of your settlement, you’ll still receive stipends and will not have to fork over your tax benefits. Entirely selling your settlement will have you end up with a lump sum of possible investing money, but at the same time lose any stipends in the future. Finally, selling the lump sum of your settlement is the best options for people who need to use the money for short-term goals. You will receive more money up front, continue receiving stipends and not lose any tax benefits.
Process of Selling a Settlement
Selling your settlement is a six-step process. First, you need to decide if it’s the right fit for you. Weigh out every possible pro and con and go over the different ways to sell. Remember why you are selling and what short and/or long-term goals you are achieving for selling your investment. Next, contact your local bank or where you have structured your settlement. There they will give you a free quote, and in some banks, allow a cash advance. Before selling your settlement you will need to arrange a court date to present the sale paperwork to a judge before the final signature. Finally, your settlement will be sold and you will receive the full settlement money within a few days via a bank transfer.
How Long Does it Take to Sell?
Keep in mind that selling a structured settlement can take time. If you’re planning to use this as food shopping money, this is probably not the best option for you. Selling can take anywhere from a week to over three weeks. The paperwork can be lengthy and to set a court date can take a few weeks. However, many banks offer a small cash allowance in case you are selling for a short term money-related situation.
How Much Will I Receive?
The question on most people’s mind is how much will I receive in the end? This is always a changing variable due to where you structured your settlement, the number of payments you sell, time and length of stipends, type of settlement, credit score and financial history, and any other fees you may need to pay off.
Many people make the mistake of using a financial institution that offers a higher upfront cash out since the full payout might be lower. Before you decide to sell, make sure it is financially sound. It is highly recommended to consult with your bank before making any final decisions.