Believe it or not, a whopping 40 million lawsuits are filed in the United States every year. Among those lawsuits, some will result in victims receiving structured settlement payments.
Since you’re reading this post, we’re willing to bet that you have a handle on what structured settlements are. For the uninitiated, a structured settlement is a series of payments one receives in the mail for damages incurred, oftentimes due to an injury or illness that was caused to them.
The downside of a structured settlement is that, since money drips in, oftentimes, what you get on a monthly basis isn’t enough to make big-ticket purchases (medical experiences, a home, etc.). To solve that problem, many sell their structured settlements for a lump-sum payment, a process that we discuss below.
Keep reading if you’re curious to learn about how you can cash out your settlement!
1. Understand the Implications of Selling
Structured settlements exist to help victims maintain their lives over a long period of time. As an example, if you slipped, fell, and injured yourself in such a way that you’re now unable to work, a judge might order a settlement that pays you millions of dollars in monthly chunks so you can be sure to meet your expenses going forward.
If you were to receive that money in one lump sum and used it irresponsibly, you’d put yourself at risk of not having money to pay your rent, mortgage, grocery bills, and so forth. That reality is something you need to consider before selling your settlement, as once your money is gone, there’s no recuperating it.
2. Figure Out What You Hope to Gain
What is it that you need from your structured settlement payout to take care of the issue you’re facing? Do you need $50,000 to cover a medical bill? Do you need a million dollars to purchase a home?
Whatever your goals are, make them clear so you can shop for settlement offers that will meet your needs.
3. Seek Quotes
Whether it’s this company or another, there are several groups out there that will gladly buy out your structured settlement. The thing to note as you look into each of your options is that every group may offer you a slightly different deal.
Structured settlement buyers purchase settlements to turn a profit. The way they do that is that the cash they give you for your settlement will be lower than what your settlement is actually worth. As an example, if your settlement was worth $100,000, your buy-out might only be $90,000, enabling the purchasing group to keep $10,000 in profit.
Your goal should be to find a settlement buyer that is reputable and that will allow you to keep the highest percentage of your money possible.
4. Look Over Paperwork With a Lawyer
When you like an offer a settlement company has issued, you’ll have paperwork you’ll need to look over and engage with to move your deal along. While most structured settlement paperwork will be boilerplate, you never know when you’ll be given a contract that does not align with your expectations.
To ensure that you don’t end up buying into a bad deal, you’ll want to dig into the details with a lawyer.
Lawyers that specialize in assessing structured settlements operate in every major community and even smaller communities have lawyers that can stretch into settlement agreements.
5. Prepare for and Obtain Court Approval
Unbeknownst to many, one needs a court’s approval to sell their settlement. This safeguard was put in place to make sure that victims don’t make a mistake in selling away their primary source of living income.
If you’ve got an offer from a reputable company, are satisfied with that offer, and had an attorney look your offer over, getting court approval should be simple. Your lawyer will help you set a court date to appear in front of a judge, who will then give all details pertaining to your cash-out a final look before blessing your arrangement.
6. Get Your Money
Once your arrangement is blessed by the court, there’s no going back. You’ll stop receiving your monthly payments and will get a check in the mail or direct deposited into your account with your settlement money, fewer fees.
In addition to the fees charged by your settlement buyer, your attorney may actually ask to receive your check-in their account so they can remove their fees as well before passing what’s leftover to you. When you receive your final check or deposit, consider your amount and ensure that what you’ve been awarded aligns with your expectations.
7. Plan for the Future
We hope you’ve considered this before seeking a settlement cash-out but even at this stage, we recommend taking a moment to consider your future. You have a lump sum of money in hand. What does that money need to do for you to help you support your long-term comfort? Do you have another source of income?
By considering your future and how you’ll get by, you’ll be less likely to back yourself into a corner by mismanaging your structured settlement money.
What Will You Do With Your Structured Settlement?
We’ve walked you through the steps involved in parting ways with your structured settlement. Does what we’ve broken down strike you as the pathway you’d like or need to take?
If you’re not sure, speak with a lawyer or financial advocacy group to better understand what selling structured settlements could mean to your life specifically.
For those of you that would like more general guidance on structured settlement payments, structured settlement service providers, and more, continue to explore content on our blog!