Structured settlements are periodic payments given to people who have been injured or suffered damage. This regular source of income is provided to ensure the victims can use the money for paying medical bills and such. Sometimes poor financial conditions or unexpected expenses can force you to sell your structured settlements for a cash lump sum. As tempting as it may sound, taking the decision to sell requires a lot of thought and a lot of homework. There are several details you need to keep in mind since the risks involved could very well be devastating for your financial future. Some of the pitfalls you should avoid are:
Selling your settlements to the first company
Selling your settlements to the first company that you find is a very costly mistake which you must avoid. It is obvious that you are in a hurry and no matter how urgent your need may be, you need to do thorough research to be sure you don't regret your decision in the long run. Though there are several genuine companies out there who are going to help you get the best offer for your settlement, there are several others which will try to take advantage of you. Ensure that the company you choose should be bonded, insured against losses and licensed. Always read the customer reviews which will give you a better idea about the reliability of the company. Check that the company you choose is accredited by the Attorney General Office and Better Business Bureau.
Selling to the highest bidder
This is perhaps one of the worst mistakes you can make while selling your structured settlements. Poor research is worse than no research at all. No matter how attractive an offer sounds, you have to be cautious about your decision. Some cheat companies will make a high offer just to get you under contract. Once you are under contract with a funding source it is a difficult task to back out. There is no guarantee that the company will give you the same offer unless it is on pen and paper.
Not getting legal help
Though it is not compulsory, most states will advise you to always seek legal help. Hiring an attorney or even a financial planner will help, not only in getting a better idea of the process but also protecting you against fake companies. With structured settlements, the entire process involves getting your settlement claim getting accepted by the court. Getting good legal advice will ensure that your settlement claim is in your best interest and has the maximum chance of getting accepted.
Selling the entire settlement
One thing that you should be absolutely clear about is that you do not need to sell the entire structured settlement. You can very well sell only as much as you will really need. This will ensure you meet your current expenses and also keep receiving the periodic income.
Fastest time possible
It is a red flag when a company tells you they can get you the money in a couple of days. No matter how eager you are to receive your money, you should be aware that such transactions require court approval which could require up to a month's time if not more.
How safe are structured settlement annuities in 2014? Watch this video to learn more.