Structured settlements can be put on the market successfully once you understand the legal requirements for this process. To facilitate the selling of these structured settlements, a statute was enacted in 2002. It requires full disclosure of all the aspects involved in the payment process, and that a judge approves the transaction while ensuring that the seller gets a fair deal.
This process targets the seller for a well-informed and reasonable transaction. It is therefore imperative that you understand it.
Outlined below are the key aspects to this process of selling structured settlements:
Carry out enough research on what companies will help you sell your structured settlement for the best deal. Once you do this, shop your structured settlement to those with companies or use Settlement Quotes to shop the payments on your behalf. It is also important to be aware of the company’s credit status to avoid transacting a deal with a broke client.
At this stage, you already have enough cash offers. After confirming that you are dealing with a reputable company, accept their offer. The transfer company will be required to verify your settlement agreement, and annuity policy so have them ready. In case you are not using a settlement agreement, have your benefit’s letter as an alternative.
You will need to sign some documents prior to executing this contract. You need to have a financial planner or an attorney to advise you on how viable your transaction is. A disclosure statement is required also as it shows all the terms of the deal: payments being sold, amount to be received, and the charges. Additionally, you are advised to seek professional advice on the disclosure statement.
There is a mandated waiting period of 3-10 days in which the seller has the right to cancel on the transaction being made. If he does this, then the transfer company has no power over the transaction and should retreat.
The documents are processed. One of the documents you must have is a settlement and release agreement. This is the document given when one has settled a lawsuit and the release given to the other party as compensation. You must also provide proof of annuity or the alternative of a benefit’s letter.
The benefit’s letter details the payments still owed to you, what company is making these payments, the policy owner and number. This letter helps speed up the process of selling structured settlements.
Approval is given by the judge to transfer the payments. The transfer company has to first verify the payment stream for you to go ahead in this process. You will go before a judge to confirm to him that you are aware of the payment process and the amount you are going to receive. He is helpful in that he will make you find the best way of how to make this money work for you. Chances are he will not approve of it if you intend to buy unwanted luxuries with this amount. You can also opt to use another third party to review your transaction in order to be meticulous.
The hearing date will be scheduled once all these requirements have been met. It usually takes 3-5 weeks for this to happen. The judge will be reviewing your settlement process. The parties concerned will receive notifications of this with the exact court date spelled out.
Court hearing and approval. This is a tricky stage that needs to be airtight in its defense. While appearing before the judge again, more factors will be looked at including your prior transactions, discount rate, employment status and mostly the reasons for selling the settlement. With this factored in the judge will finally come to his conclusion and approve the transaction.
Funds transfer. After the order has been signed, the insurance company receives it and acknowledges the payments. At this point, the transfer company will then wire the funds.
When this process has been followed carefully, the seller will not only get a good investment back but also have the opportunity to enjoy the rates. The inclusion of a judge in this process is vital to ensure that you are working with a person of integrity.