Selling your Structured Settlement Payments

Owning a structured settlement annuity gives you a lot of benefits. Structured settlement payments provide long term financial security for you and your dependents, and the payments and earned interest are tax free. In case you need the money for any emergent situations or you find that you can invest this money in a better way you are entitled to do it as per law.

The federal law HR 2884 permits you to sell your structured settlement payments without paying any taxes. Two-thirds of states in the United States also permit the sale of structured settlement payments in addition to federal laws. However, in order to get the tax free benefit it is necessary that this transaction is approved by court.

Selling Your Structured Settlement

Getting approval for the sale of your structured settlement payments from the court is relatively easy if you have solid reasons to prove that you require this money. The approval or otherwise will be given by the judge after reviewing your case to decide whether you require this money for a transaction that will benefit you and your dependents.

As long as you are an adult of sound mind, and you can proved that you and your dependents will benefit from the transaction, the judge has very little reason to deny your case. Your personal appearance at the trial will help in getting a positive verdict. You can sell your structured settlement payments even if the court does not approve of it; however, this will deprive you of the tax free status for this payment and its interest.

It has been found in practice that in a large number of cases the purchasing company working with the seller purchases the structured settlement payments. They may also be willing to handle the legal issues to facilitate finalization of this sale. They will not charge you for this extra effort they have taken for this; however, in the absence of court approval, you are liable to pay taxes on the money you receive.

Quotations have to be obtained from various purchasing companies for purchasing the settlement. Getting quotations from a number of companies is advantageous to you because it will give you a chance to select the best among them. In case you find a suitable purchasing company out of the various quotes received, you should send to the purchasing company copies of the structured settlement policy. You will receive from the purchasing company a disclosure document which you are expected to sign. You will find in this document the details of the conditions of the transaction. You must scrutinize the document thoroughly, sign it and return to the purchasing company.

In order to proceed further it is essential that the court approval is got and this is the next step in this process. Under normal circumstances this takes up to 90 days and this depends on your state of residence and your insurance company. In most cases, once you are approved, you will receive your money within 10 days.