What Most People Dont Know About Selling Your Structured Settlement Payments

When you reach a settlement for an injury you have suffered, or for loss and damage caused by a product, you may opt to have your compensation paid in series of periodic payments instead of one lump sum. This is called a structured settlement. Structured settlements are free of federal taxes and may suit your long term needs better. Their use is supported by the federal government and disability associations, because they can provide long term financial security. The periodic payments after often farmed out to third party providers, who cover the payments with the purchase of annuities.

Secondary market for structured settlements

Structured settlements don’t usually allow for the payment plan to be altered, so if your needs or circumstances change, it can be a problem. This is where the secondary market for structured settlements comes in. If you want to, you can ‘sell’ your structured settlement to a third party in exchange for a lump sum. Obviously there is a price to pay, and it’s usually between 12% to 22% discount on what you would have otherwise received. Around 10% of those with structured settlements use these schemes, and you don’t have to transfer all of your compensation. Most schemes involve the sale of only part of a payee’s future payment rights.

NASP

Choosing a structured settlement transfer is a serious decision, and you need to ensure that your ongoing needs will be met. The National Association of Settlement Purchasers or NASP is the only trade body in the market, and it seeks to ensure that transfers are fair, competitive and transparent. They have a list of accredited members who all have a great deal of experience in the market, are financed only by non-affiliated third party investors, and who agree to adhere to their strict code of conduct.