A structured settlement is an agreement where a defendant who loses a personal injury lawsuit has to pay the judgment to the plaintiff with fixed amounts of money over a span of time rather than a onetime lump sum. If the plaintiff chooses to do so, he or she can sell structured settlement payments to a third party in exchange for a lump sum. The typical procedure is as follows (details may vary according to state law):
(1) The person selling structured settlement payments sends documentation including information about the insurance company, the amount of the settlement, and the payment plan to the potential buyer.
(2) The potential buyer makes a purchase offer.
(3) If interested, the person selling structured settlement payments sends the potential buyer a copy of his structured settlement policy and the settlements agreement.
(4) The seller and the buyer draw up an agreement detailing the proposed transaction.
(5) The seller and the buyer submit the agreement along with an application to the court for approval.
(6) The court reviews the documentation and approves the sale once it determines that the transaction is in the best interests of the seller.
The whole process is usually completed in a few weeks.
What Can Be Considered a Fair Price?
It is important to keep in mind that all buyers will quote a price that is less than the total value of the payments received. Time is money, and a lump sum payment is always worth more than payments over time because of the effects of inflation. Therefore it is important to accurately calculate the time value of money in order to arrive at a fair price. You may want to consult a financial expert for the calculation and other questions you might have about selling structured settlement payments.
Tags: Sell Structured Settlement Payments, selling structured settlement payments, the process of seeling settlements
