Structured Settlements: Selling your payments

People who own a structured settlement annuity benefit a lot from it. Structured settlement payments are advantageous in providing financial security on a long term basis for you and your family and the payments as well as interest earned are free from taxes. In case you need the money for any emergent situations or you find that you can invest this money in a better way you are entitled to do it as per law.

You can sell your structured settlement payments legally in US as per the federal law HR 2884, and this sale can be made without your paying any tax. The sale of structured settlement payments is allowed not only in federal laws but also in the state laws of the two-thirds of the states in the United States.  In order to become eligible for selling this without paying any taxes you should get the prior approval of the court.

Selling Your Structured Settlement

Getting approval for the sale of your structured settlement payments from the court is relatively easy if you have solid reasons to prove that you require this money. Your proof will be examined by the judge to find out whether this transaction is in the interest of you and your family.

As long as you are an adult of sound mind, and you can proved that you and your dependents will benefit from the transaction, the judge has very little reason to deny your case. You ensure that you attend the hearing in the court on that day which may help your cause much. Even if you don’t get court approval for selling the structures settlement payments you can still sell this, however you will not get the tax free status for this.

The purchasing company with whom you are having discussions might be interested in purchasing your structured settlement payments. To facilitate finalization of the sale they will handle necessary legal formalities. They will not charge you for this extra effort they have taken for this; however, in the absence of court approval, you are liable to pay taxes on the money you receive.

In order to select the right purchasing company, you should call for quotations from various purchasing companies. It is always beneficial for you to get multiple quotes. If you like a quote that is given, you will send in copies of the structured settlement policy to the purchasing company. In return, the purchasing company will be sending a disclosure document that should be signed by you. This document contains the clauses and conditions of the transaction. This should be signed and returned after your checking.

The court hearing will be the next step in this process. The duration for court approval depends on your state of residence and also the state of residence of your insurance company and this will normally be about 90 days. In most cases, once you are approved, you will receive your money within 10 days.