Structured settlements are essentially scheduled payouts over a period of time as compensation for injury and/or damage sustained by one inflicted by another. This is commonly undertaken as a means of agreeing to a compromise regarding the liability one has committed upon another.
There are instances though that the recipient needs a large sum of cash and the installments receivable would not be able to cover the expense needed. This is where the process of structured settlement transfers come to fore.
The Basics of Structured Settlement Transfers
The following are some of the basic facts to know about structured settlement transfers:
- Structured settlement transfers provide the recipient of the funds financial freedom. No longer would there be a long wait for the full value to be received. Instead, by doing the structured settlement transfer, one is able to live the life with the money due you now and not later.
- Structured settlement transfers provide value to the recipient now not later. While there is some form of loss or discount to the monetary value received, there is a lump sum value received outright. Before doing so, it is best to seek the advice of a lawyer as well as a financial planner to be fully apprised as to the consequences and effects of the given transfer.
- Structured settlement transfers are not debts that need to be paid back. What occurs, once this process is approved would be the finance company would take the place of the recipient in exchange for cash and other considerations at a value which is lower than what the full original value would be. As such, one sells off the right to receive the payments from the structured settlement.
Another term for this kind of transaction would be the buyout of a structured settlement. Before this is considered as validly conducted, there are certain requisites needing completion for structured settlement transfers. These are as follows:
- There must be court approval obtained for the said transfer to be conducted. This is done through a petition filed in court and judicial approval is needed. The standard for approval would be the best interest for all standard and once this is established with the transfer, the structured settlement buy out would then be approved.
- Amongst the documentation needed to be submitted would be a compliance certification of the financial company seeking to obtain the structured settlement transfer. Also needed would be a structured settlement quote submitted to the court.
- The last step would be the payout of the lump sum from the financing company. This would be the red letter date for the recipient to close the structured settlement transfer.
Structured settlement transfers are not simple transactions that can be done in one fell swoop. There needs to be time and patience in undertaking the said transaction. In the end, the decision to make this a reality would be the completion of all the legal requisites to attain the benefits promised in structured settlement transactions.
For related reading learn about the sales of structured settlements.