Why do people receiving structured settlement payments sell their future payments?
- Achieve personal or family financial objectives
- Adapt to changing circumstances in their lives
- Gain access to assets they already own
I thought structured settlement payments were used to protect people who are seriously injured, can’t work, and depend on those payments for their income. Won’t selling those payments leave them without any financial support?
Even people who can’t work or depend in part on those payments often need to sell a part of their future payment rights when they have emergent needs. For example, a man who uses a wheelchair because of a train accident might receive a monthly payment of $6,000. The secondary market will give him the flexibility to transfer $750 per month for 60 months so he can buy a wheelchair-accessible van to make it easier to get around.
What laws govern the secondary market?
In 2001 NASP and other industry leaders wrote a Model State Structured Settlement Protection Act. As of today, most states have passed settlement transfer laws requiring disclosures and court approval of structured settlement transfers. In 2002, a federal law extended the tax-free nature of future payments to lump-sum payouts made in a sale in the secondary market. These state and federal laws provide a firm regulatory foundation to the secondary market.
Why can’t I just use my structured settlements as collateral for a bank loan?
Is it a bad idea to sell my future structured settlement payments?
Not if you know what you are doing, why you are doing it, and are assisted by experts who understand the process. Although MyLumpsum does not provide legal, financial or professional advice, we will help you along the way, so that you can obtain access to your money as quicky as possible in order to address your needs. You understand your financial, personal, and family circumstances and situation better than anyone else. You have the added security of knowing that a judge will review the transaction and protect you to make sure it is in your best interest.