Considerations involving the need to sell a structured settlement payment are many and varied. These payments are usually the result of a settlement has been reached in a personal injury or tort lawsuit and will include such features as a payment of settlement money over a defined period of time. These sorts of settlements have grown in popularity over the last several decades.

Considerations involving the need to sell a structured settlement payment are many and varied. These payments are usually the result of a settlement has been reached in a personal injury or tort lawsuit and will include such features as a payment of settlement money over a defined period of time. These sorts of settlements have grown in popularity over the last several decades.

These sorts of payments were created to act in lieu of lump-sum payments which, prior to the 1970s, were common settlement instruments in personal injury or other lawsuit-type cases. In the vast majority of cases, a structured settlement is paid off over a pre-defined length of time and in pre-defined amounts of money. There are many people who are beneficiaries of structured settlements today.

There are times, however, when it can make a fair bit of sense to look at the structured settlement payment and perhaps sell off a portion of it in order to raise ready cash. This may be because certain emergencies or other obligations involving finances has arisen. Laws vary by state, but most do allow for such payments to be sold in order to meet a range of obligations.

It helps to think of this need as being similar to the saying that a bird in the hand is worth two in the bush in this case. People who have a need for fast cash prefer to have some amount of money in the hand rather than to wait for long periods of time to get that same amount of money paid off on an annuity basis. The law favors such sales, as most such payments are not subject to federal tax.

This last feature can make for a powerful argument when it comes to trying to decide whether selling a portion of a structured settlement can make sense. In fact, it is a powerful incentive in many cases. Usually, sales of such settlements start in the low thousands of dollars and can run more than $1 million in many cases. Any sale price quotes will depend on how much of the payment is going to be sold.

For one, always make sure the institution or funding source that will be buying a portion of the payment is reputable and can be researched before agreeing to make a commitment to sell the settlement payment. At a minimum, the funding source should be insured, licensed to conduct such financial transactions and also have a bond guaranteeing that it can meet financial obligations.

Also, keep in mind that any such sale will tend to be at a negotiated discount rate between the recipient of the structured settlement payment and the funding source making the purchase of the payment. What this means is to be prepared to negotiate for as favorable a payment as can be obtained. Additionally, many states require the settlement recipient to obtain approval from a judge before the deal can be closed.

There are certainly plenty of occasions when the need to sell structured settlement payment may arise. Some people require immediate cash or others are weary of waiting for an annuity payment. Regardless, check the financial institution or funding source out thoroughly before agreeing to any sale. And expect about 90 days lag time between sale closure and payment.