Help With Selling a Structured Settlement

Sell structured settlements to accredited buyers using the help of qualified advisors.

If you receive a structured settlement due to some injury or liability, you have a number of different options to sell the contract. The larger the settlement or the more extended period that the benefits are received, the more important it is for you to obtain outside help. Either way, make sure you carefully consider all options before taking action.

Advisors

Gather excellent advisors including a lawyer and financial planner, especially if the settlement is large enough to significantly change your standard of living. The lawyer is responsible for closing any loopholes that allow the buyer of the contract to escape full and fair payment. The financial adviser and accountant are responsible for developing a detailed repayment schedule or approximate contract value. They can also manage with the holding, distribution and payment plan.

Guidelines

The rule of thumb for structured settlements is that the longer the period of payout, the lower the lump sum will be. For example, a 10-year settlement may receive a 30 percent upfront lump sum payout, while a five-year settlement may provide 75 percent. Another rule is that the creditworthiness of the borrower has a heavy bearing on the contract value. A structured settlement from the state will have a much higher payout rate than a mom-and-pop small business.

Buyers

Buyers for structured settlements come in various types. They can be firms staffed with personal injury or insurance lawyers that have a keen understanding of the dynamics of structured settlements. Another group includes hedge funds and financial firms that buy distressed or low quality debt. These firms will try to offer a low price but may be able to conduct a quicker transaction. You can find these firms through a simple Internet search or by asking your advisers.

Closing the Sale

Your lawyer and financial adviser should make the first offer for any proposed sale of a structured settlement. Set the initial offer high so that you will have an anchor to bargain from. If your advisers tell you that a transaction such as yours typically results in a 60 percent upfront payout rate, start with an offer of 80 percent. Allow the legal team to do most of the hard negotiating based on their experience and expertise.

References

• Structured Settlement Info: Cash for Your Structured Settlements; David Springer
• Expert Law: Selling Your Structured Settlement; Aaron Larson; April 2005