Converting a structured settlement payment into cash does not need to be challenging when you understand the process.
You may be having doubts about converting your annuity payments into cash because it might affect your retirement plans. A structured settlement annuity is often used in conjunction with other retirement investments. Many people that have been injured go through a lengthy court process only to receive a structured settlement annuity payment in lieu of a lump sum of cash. While the end result of the legal battle was positive, monthly payments can often leave the injured party feeling trapped in the structured settlement long-term investment without knowing where to turn.
Financial difficulties often make it tough to survive, especially when structured settlement payments are not enough to cover monthly living expenses and medical bills. In an effort to reduce some of the stress, pay off legal bills, and finally have a little extra cash, it is possible to convert the structured annuity into a lump sum of cash.
Converting a Structured Settlement
For any individual looking to convert their structured settlement annuity into cash, there are many things they must consider. That includes doing research, negotiating for a cash offer, and accepting an offer.
- Researching and Locating Buyers – It is essential to shop around for a few quality, reputable companies to make sure you have located the best deal that suits your requirements. Look online, ask attorneys, and review any Better Business Bureau complaints before making a decision on choosing a structured settlement buyer.
- Negotiating and Accepting an Offer – After reviewing their initial offer, it is time to negotiate. Remember that you have the upper hand, and the ability to counter the trade. Your structured settlement annuity has value to the purchaser, and can be negotiated just like any other trading instrument. Once you feel comfortable and fully comprehend the deal, you can accept their cash offer. At that point, you most likely will send them signed settlement agreement to begin the process of converting the annuity into cash.
- Signing the Documents – Once the offer has been accepted, you will receive documents that fully explain the terms of the agreement. Depending on your state, the documents must be reviewed by someone that can offer independent, professional advice. This might include a financial planner, an attorney, or others. Some states require a “cooling off” period of up to 10 days, which allows you to cancel your agreement should you desire.
- Document Processing – Once all the documents of been signed, the purchaser will usually verify all remaining payments with the insurance company (that is making the monthly payments to you) along with confirming you have the right to sell your annuity.
- The Court Process – Once it has been established by the purchaser that you have the right to sell, and have fully agreed to the terms, it is time to begin the court process. An attorney working for the buyer will submit the documents to your local court (and usually cover all costs). A hearing date will be set, typically three to six weeks later. You will be required to attend, and then you will be notified, usually by certified mail, the court date, court room and time of the hearing.
While not true for every state, you most likely will be required to appear before the court and the judge. At this time, a legal determination will be made on whether the annuity conversion into cash transaction will be best for you in the future. The judge will take into consideration the discount rate, your employment status, any prior transaction concerning your annuity, and the detailed reasons of why you need to sell your annuity for cash. Once the judge approves the annuity conversion, he or she will sign the court order.