An Alternative To Bankruptcy

A structured settlement annuity is often the alternative to lump sum settlements when resolving cases out of court

. This involves an agreement for a predetermined amount of cash to be paid out to one party for a fixed length of time. These payments are also known as periodic payments.

The periodic payments can be made in installments of equal or varying values. These are basically long-term payments, because they could be made for the duration of the life of the claimant. This is why it is important to check the credentials of the annuity provider and make sure that it can fulfill the terms of the settlement.

The start date, duration and frequency of the payment are also specified in the settlement agreement. These are calculated based on the claimant's monthly expenses, percentage, extent of hazard in occupation and retirement plans. Under certain conditions, transferring of obligation from the insurance company making the payment to a third party is allowed.

Some of the issues involving the structured settlement annuity include payments losing their value over time due to inflation and the recipient's financial situation changing. It is also possible that there will come a time when the recipient will need more money than he is receiving from the

settlement. However, the structure of payments should not be altered once both parties have agreed on it, not if the payments are to remain tax-free.

These are some of the reasons why people sell structure settlement payments. They have the option to sell in part or in whole, but either way, the lump sum they will receive makes them more financially flexible. They can use it as capital for a business venture or make real estate purchases.

There are many institutions that buy structured settlements, with transactions running in the tens of thousands up to millions of dollars. In choosing a settlement purchaser, it is important to look into the past

payment records and working relationships with insurance companies. A consistently good payment record and working relationship with various insurance companies means a good chance of the transaction being approved quickly.

Purchasers should also be licensed, insured and bonded. This is to protect clients and ensure that they get their cash if the purchaser goes out of business. It is also advisable to take advantage of the free consultations offered by settlement purchasers, not only to assess a

prospect, but to get different opinions on whether selling the settlement is the best option and if there are other options as well.

The decision to keep a structured settlement intact versus selling the payments should depend on the recipient's circumstances. For example, a retiree or a person with low earning ability would benefit from a structure settlement annuity, since it gives them a regular source of funds with little or no effort on their part. People who want control

of their finances and are capable of managing their investment portfolio can sell structured settlement payments to finance business ventures or investment purchases.

by: Jordan McPelt

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