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What You Need to Know About Selling Structured Settlements

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Many people, all over the world, dream of winning the lottery or a large lawsuit. What most people do not realize is that most of these situations do not result in one large lump sum payments. Whether you have lottery winnings or an annuity, you most likely will have annual payments instead of one large one. Many people are fine with this arrangement but some people would prefer to get cash for a structured settlement.

What is the point of annuity?

Annuity payments come from a variety of sources. If you were named to the beneficiary in someone’s will, they may have meant you to get a check every year. These can also refer to lottery payments, the settlement for a lawsuit or you can buy someone else’s annuity. Some people like to buy an annuity because they feel more secure knowing they have an income that will come in for decades.

Should I sell my annuity?

If you have an annuity, there are a lot of good reasons to sell it. If you are looking to get cash for a structured settlement, the first thing you will want to do is take a good long look at your finances. Talk to a financial advisor that you trust and go over your options. You will have to go to court and have your sale approved by a judge. They will want to make sure you totally understand all of the ramifications of your sale. You will need to have a good reason for wanting to get cash for a structured settlement. These reasons are typically:

  • Avoid filing for bankruptcy. There are many, many Americans who are in the position to have to file for bankruptcy. Avoiding bankruptcy is a very good reason to sell.
  • Get out of debt. The average household in the United States has 13 credit cards. Nearly 40% of all people in the country spend more than they take in. If you can get out of debt by selling a structured settlement, that is a great reason to sell.
  • Start a new business. Most new businesses that fail do not make it because they lack access to start up capital. Selling your annuity will give you the money you need to get your business off of the ground.
  • Buy a home or pay off a mortgage. If you can pay off your mortgage or buy your dream home, these are great reasons to sell an annuity.
  • Pay for someone’s higher education. Few things increase a person’e earnings potential like getting a higher education. They are expensive and it can be impossible to get financial aid if you have annuity or structured settlement payments coming in.

Tips for selling fixed annuities:

  • Take your time. Yes, the main reason people want to get their cash for a structured settlement quickly but you need to take your time when you are deciding to sell and to pick the right option for you. If the reason you want to sell your structured settlement is to get out of debt (at least one in every five Americans is in “debt hardship.”) If you are not careful, you can make things worse, not better when you sell your settlement.
  • Talk to a few buyers. You want to talk to a few different companies who pay cash for a structured settlement and get a few offers before you pick one. Once you have taken the time to talk to a few companies, you can pick the one that has the best deal for your annuity.
  • Talk to professionals. When you sell a structured settlement, it is not like selling a car or even a house. It is always a good idea to have a competent professional on your side to look over the fine print in any agreement you sign and to protect you from any hidden fees. Having someone who has a lot of experience in this area help you with the sale of your structured settlement, you can make sure you have all of your i’s dotted and your t’s crossed before you finalize your sale.

The decision to sell a structured settlement is a very personal one. You need to sit down with your family and financial advisor and find what your best options are.

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