FAQs
What is a structured settlement?
A structured settlement is an agreement that is reached between a claimant (person affected) and a defendant (person responsible) to settle a dispute arising from an accident, medical malpractice, wrongful death, or other event resulting in personal injury. The defendant, generally through his or her insurance company, agrees to pay monetary compensation to the claimant in a series of future payments rather than in an immediate lump sum. To fund the future payments, the defendant purchases an annuity and the annuity issuer (usually an insurance company) ensures that the payments agreed to by the parties are made.
How do different service providers work?
Structured settlement recipients all over the United States exchange their future payments for an immediate lump sum of money. Specialists will discuss your situation with you and help you make a decision about selling all of your payments, or only part of your payment stream.
How do I qualify?
If you receive structured settlement annuity payments, and you live in a state that allows for the assignment of your payments, you are automatically qualified for all services.
What if I live in a state that does not allow for the assignment of annuity payments?
There are currently five jurisdictions that do not provide statutory provisions for the sale of annuity payments: DC, NH, ND, VT, and WI.
Do I need to have good credit in order to sell my settlement payments?
No. Vendors have no credit score requirement.
Can I sell all my payments or only a portion of my payments for a lump sum?
It is up to you and how much money you need as to whether or not you sell all or only a few of your future payments.
How long does it take to get funded?
The time frame varies based on the statutory requirements of your state. A typical transaction will take between 60 and 90 days. Depending on your state, to complete the transaction may take as little as four weeks. Once your transaction is in process, you should have a more accurate timeline.
Can I get a cash advance while I wait for my transaction to be completed?
Certain circumstances permit a cash advance, however there are qualifications regarding your transaction that must be met.
When do I have to pay the advance back?
There is no need to worry about payback dates or extra fees. The money you receive from your advance check is automatically deducted from your lump sum.
Do I need a lawyer?
Some states require that you talk to an attorney before you proceed with a transaction, but many do not. In any transaction that affects your structured settlement annuity, it is recommend that you obtain independent legal advice to reinforce and support your decision to sell.
What documents do I need?
To start your transaction, you need a copy of your settlement agreement, annuity policy/contract, and a copy of your driver’s license or other form of personal identification. If you have lost or misplaced your documents, you can usually contact the annuity company that is making your payments and ask them to provide you with another copy.
Will I have to pay taxes on the lump sum I receive from my annuity payments?
Generally you will not have to pay taxes. In most cases when a court order is obtained, your structured settlement annuity stream retains its tax-free status when it is converted to a lump sum. It is recommended that you consult with a tax advisor to be sure.
How do I know my rights are protected?
Federal law, combined with laws passed in most states, clearly directs what steps must be taken legally when you decide to sell your future payments for a lump sum. These laws protect your rights and interests by requiring a court ordered approval of any transaction. Currently, 46 states carry statutes.
How do I know if a vendor is reputable and trustworthy?
Look for consistency in serving the industry. If you conduct some online searches and find little information on the company you are considering, that should be a sign. Also, be sure to check customer review sites to read about other experiences people have had with various vendors.