Selling Your Structured Settlement for Maximum Cash - An Illusion or Reality

What a Structured Settlement Is and Why Some Plaintiffs Opt to Sell Their Future Payments?

Senior couple signing financial contract (Photo credit: SalFalko)

As you probably know, people who get injured in various accidents usually receive a structured settlement. This is actually a monetary compensation paid by the insurance company in a stream of fixed installments over time. Such financial agreements typically arise as the result of a lawsuit from various personal injury cases, like traffic accidents, medical malpractice, work related injuries, wrongful death and some others. There may be also cases with no relation to personal injuries, like legal malpractice, worker's compensation, commercial cases, etc. However, in any of these circumstances the entire amount of monetary award assigned to a plaintiff is spread out over some time period and distributed in the form of monthly, quarterly or annual payments, rather than in a single lump sum.

Of course, any structured settlement owned may become an excellent source of substantial additional income. Though many structured settlement holders who face sudden life circumstances change and unforeseen financial burdens, find that they need pretty much more cash than their periodic payments provide. There is also a group of plaintiffs who consider it rather stressful and inconvenient to be tied up to the inflexible schedule of small periodic payments and, therefore, wish to unlock their future payments and get access to their legal money in full now to use it however they need: either to eliminate current financial obligations or meet some short-term or long-term goals.

For both groups of structured settlement recipients turning their future payments into a lump sum of cash is definitely the most deliberate choice. Since 1988, it has become legal to sell structured settlements, annuities, insurance policies and some other related financial agreements in US in return for a lump sum of cash. In such a way, funding companies, also known as settlement funders, have quickly emerged on the asset-backed market. They are dedicated to accomplish such transactions allowing payment recipients to gain absolute control over their finances.

The truth is that many plaintiffs hesitate to sell their structured settlements, even when facing the dire need in cash, mainly influenced by a rather widespread opinion that a settlement sale transaction may dramatically reduce their monetary reward. But what actually happens with your money when you sell your future payments to a funding company? How much is your structured settlement worth in fact? What should you do in order to get most cash for your settlement or is it still wiser to keep to the initial payment schedule with small periodic installments coming over time? Let's clean the air on these rather crucial questions for each and every plaintiff.

Roots of the Misconception

Indeed, there is a strong belief that getting maximum cash after selling a structured settlement is no more than a myth and a plaintiff would get a dramatically reduced amount of his/her money. In fact, settlement sale transactions owe their bad reputation to non-direct funders. Unfortunately, there are some funding companies on the asset-backed market that partner with intermediate brokers and use some third-party assistance.

They typically require certain fees for their services, and it is rather obvious, that every broker in this chain will cut off a piece of your monetary award. As longer this chain is, as less money you may expect to get. And like many other promises and guarantees connected with third-party companies, adequate settlement cash payouts may also turn to be just an illusion.

When Getting Maximum Cash is Real

But the situation may go the whole different way, if you are dealing with a direct funder. Established and reputable funding companies operate typically as direct funders avoiding any intermediate brokers during the whole transaction process. While applying various solid financial and legal instruments, they are able to provide plaintiffs with maximum cash advances for their structured or annuity settlements. When you hand in all related papers, their financial consultants will determine the value of your settlement and tailor a package meeting all your specific needs and goals.

It's also worth to point out that an established settlement funding company imperatively submits every single transfer agreement directly to the local court for review to ensure that the proposed cash payout option is in the best possible interest of a plaintiff and a purchasing company works in the fullest compliance with both state and federal laws.

In such a way, whether getting maximum cash for your structured settlement is an illusion or reality is the matter of your deliberate choice only. If you would like to share your personal experience of cashing out future settlement payouts, feel free to do that in the comments below.

Author's Bio

Derek Wrend is a PR manager at OzarkFunding - a settlement funding company offering the maximum lumpsum of cash for structured settlements.

Your Financial Life After 50. Are You Planning Right?

As you get closer to retirement age, you start to wonder if you are taking the right steps to prepare for your financial future. When it comes to preparing for your golden years, there is no such thing as too late. There are steps that everyone can take after the age of 50 to make sure that they are ready for the life changes to come.

Have The Proper Insurance

In most cases, couples have long-term financial plans that involve the two of them contributing funds to reach certain goals. If something were to happen to one of the spouses, then the other could be left in financial ruin. It is critical to have all of your plans insured to protect against any kind of potential disaster. Term life insurance can help protect a home while the mortgage is still being paid and it can also be used to make sure that a surviving spouse is still able to survive if the other is to pass away before financial goals can be reached. Life insurance will also help offset the costs of your final arrangements and help relieve your next of kin of any of the debt that you leave behind. Image via Flickr by moolanomy

Think Long And Short-Term

Good financial planning includes short-term and long-term goals that need to be achieved in order to maintain the lifestyle that you want. When people reach the age of 50, they start to think in terms of long-term needs as opposed to any short-term requirements. But immediate goals such as paying off your mortgage or buying a new car are just as important as providing for your retirement income. Be sure that you attend to all of your financial goals as you get ready to celebrate the next stage in your life. Image via Flickr by NRMA New Cars

Get An Expert Involved

Pride can sometimes get in the way of good planning. As we get older, we often feel that we have everything under control. For example, when we get a little tight on money, we know that we can use Arizona payday loans to take care of things until our paychecks arrive. But it never hurts to have a financial planner review your arrangements and make sure that you are doing everything you can to prepare for your future. An experienced professional can help point out areas that could use improvement and make sure you are on the right track. Image via Flickr by norfolkdistrict

Look To The Future

The biggest mistake that people make when they start discussing their financial goals after the age of 50 is to dwell on the past. Any decisions that were made years ago are done and over. If you want to make solid plans for your financial future, then let the past stay behind you and stay focused on the future.
You have plans for after retirement that will need to be funded in some way. As you draw closer to your anticipated retirement, it is essential that you review your financial plans and make sure that you are taking the steps you need to live the life you have always dreamed of. Image via Flickr by Nature Pictures by ForestWander

About the Author
Shaun Chatman is a well published author on many authority sites. He lives in Dunedin, FL, and spends his free time playing with his kids or advising friends on his pet subjects: tech, gadgets, travel and finance.


Resources:
http://www.realty-1-strategic-advisors.com/life-stages-of-financial-planning.html
http://moneyexcel.com/2991/new-year-resolutions-for-a-better-financial-life-2013
http://usatoday30.usatoday.com/money/jobcenter/jobhunt/salary/2002-11-14-financial-future1_x.htm

More Structured Settlement Questions

Have you been awarded a large amount of money from a lawsuit? If so, you might be curious about structured settlements. The court will offer you a choice of how and when you want to receive your cash reward. You may choose to receive it all at once, or you can set up a long term payment plan. This long term payment plan is what is known as a structured settlement. Before you make any decisions regarding your reward money it is a good idea to learn as much as you can about how structured settlements work. Here are some more answers to your structured settlement questions.

Why Would I Want to Create a Structured Settlement?

There are many advantages to receiving your reward money in the form of a structured settlement. It will save you in interest taxes on any investments you make. It will also allow you to set up a steady stream of income so that you can properly plan for your future. Structured payments help ensure that you don’t accidentally spend all of your compensation at one time. Studies clearly show that compensation recipients tend to spend less of their reward if it is provided for them through several payments over a long period of time.

Will My Reward Be Any Less if I Choose a Structured Payout?

No. The amount that the court has awarded you will not change. You will receive the same amount whether you choose a structured payout plan or if you choose to get all of the money at once. However, structured settlement payments can help save you money in the form of taxes.

How Much Will a Structured Settlement Save Me in Taxes?

The amount that a structured settlement could save you in taxes could be substantial. You can expect to save approximately 25% to 35% of your total reward in state and federal taxes on any income your reward will generate. All settlement funds are tax free, but you will be taxed on any interest you accrue if you invest any of your reward. If you invest the single large lump sum you will end up paying more in taxes than if you invest using a structured payment plan.

How Much Flexibility Will I Have to Set Up This Form of Payment?

Structured settlements offer a tremendous amount of flexibility in determining how and when the payments will be made. You can set up equal payments over a set number of years. An example of this would be to receive $1000 a month for 20 years. You can set up payments on a per week basis, or you can set up monthly or bi-monthly payments. The payments do not have to be equal either. You could set up specific periods of time that pay out more than others. For example, if you were injured in an accident and require a new motorized wheelchair every 5 years, you could set up a payment plan that pays out more money every 5 years in addition to the regular monthly payments. This would allow you to pay for what you need when you need it.

What If I Change My Mind?

Once a structured settlement has been created it cannot be changed or altered. So if you currently receive $500 a month from a structured settlement and you need $1000 the next month, you cannot change your agreement. You can sell part of your total monetary reward to a company in exchange for receiving a lump sum of money now, when you need it.  The result of this form of transaction will be that you get all of your money upfront, but you will lose a percentage of it to the company.

Overall, structured settlements are very helpful to plaintiffs, but it is not recommended that you pursue this form of payment until you speak with a lawyer or tax professional. 

Top 4 Tips on Buying Gold Jewelry as an Investment

A couple of 14-carat gold wedding rings. Picture taken in Brazil, where 14-carat is the most common kind of gold used in jewelry. (Photo credit: Wikipedia)

While gold coins may look better on paper, for those who want an investment that they can actively enjoy, gold jewelry is an excellent choice. Many people choose gold for women’s and men’s wedding bands, but you don’t need to stop there; gold jewelry can easily supplant the bulk of your costume jewelry as well. Here are four tips on buying gold jewelry as an investment.

Choose a higher karat grade. Gold is a naturally soft metal, and as such it must be alloyed with a harder metal if its intended use is as jewelry that will be worn on a regular basis, such as wedding rings for men or women. Pure gold is 24K, but the most common karat purities seen in gold jewelry are 10K, 14K and 18K; the higher the karat grade, the more pure gold used. To quickly calculate how much pure gold is in a particular karat purity, simply divide the karat grade by 24. For example, 18K gold is 18/24, or 75% pure gold. Needless to say, higher karat grades are more expensive due to the presence of more pure gold.

For gold jewelry that you intend on wearing frequently, 18K is your best bet for both investment and durability purposes. While 10K and 14K gold jewelry may be harder and somewhat more durable due to the increased presence of alloying material, both of these karat purities are significantly less valuable. If purchasing gold jewelry that you intend to wear less frequently, or jewelry that is less likely to acquire any damage through wear (such as earrings or a necklace), you might also consider 22K gold, which is fairly soft but very valuable.

Be discriminating when it comes to alloying material. Not all alloying materials are created equal when it comes to gold jewelry. Higher karat purities of gold like 18K and 22K tend to use higher quality alloys, but you will still want to find out exactly which alloy or alloys was used prior to making a gold jewelry purchase. Alloying material will to some degree depend on the color of gold that you are purchasing; gold is naturally yellow, but other common colors found in gold jewelry include white gold and rose gold. For white gold in particular, the quality of alloying material can vary greatly, from less expensive nickel to high quality precious platinum group metals (PGMs) like platinum and palladium. The quality of the alloying material should ultimately factor into the price that you pay for your gold jewelry.

Buy wholesale. When purchasing gold jewelry as an investment, the last thing you’ll want to do is to pay full price at a high end jewelry store. While some designer brands like Tiffany or Cartier are considered to hold a certain value that is completely independent from the material used, the higher cost of these items may start to detract from the overall investment value.

To get a sense of how much you’re paying for a particular piece of jewelry versus the actual value of the gold that it contains, use the weight of the item and current gold prices to calculate worth versus cost, taking into account that lower karat purities will not have the same value as pure gold. If you are buying an item that you have no immediate intention of selling (such as women’s or men’s wedding bands), do some comparison shopping online to make sure that you are getting the best price for your desired item. 

Watch the market. Part of what makes gold jewelry such a good investment is its consistency in the market, especially when compared to more volatile precious metal commodities like platinum. Nonetheless, gold prices still experience normal market fluctuations, so try to buy gold jewelry whenever there is a dip in gold prices. On the flip side, if you are thinking of selling your gold jewelry, make sure the market favors you before unloading it. In an ideal world, you will be buying wholesale during a dip in the market, and selling retail when the market is high.

Tanya Naouri writes articles on gold men’s wedding rings for men for JustMensRings.com.

Different Financial Risk Types Explained

In an uncertain financial market, people with money to spare are always looking for investments with the perfect combination of low risks and high returns. 

Although no investment type is entirely without risk, by doing your research and trading wisely, you can still see big returns on your money. 

But which investment type is right for you? Here’s a quick guide to help you decide how to get the most out of your money. 

Share investment 

Investing in shares in generally seen as a long-term investment. It is extremely popular as the growth of shares normally out-performs inflation, giving you a greater return for your investment than a bank could.

When you buy shares in a company, you become a partial owner of that company. Depending on how many shares you have, you can vote in shareholder meetings and have a certain amount of say in the running of the company. 

If the value of that company goes up over time, so do the value of your shares. Therefore giving you a profit on your initial investment when it comes time to sell. 

Historically, investing in shares has produced some of the strongest after-tax investment returns over long periods of time. So if you’re looking for somewhere to put your money, this could be a great option. 

Two approaches can be taken when dealing with shares. You can either buy into a company and then hold on to your shares for many years. Or you can actively trade between companies, buying and selling shares as values fluctuate. 

Before you buy any shares, research potential investments as thoroughly as you can. Invest in the right company, and your money could be working for you for years to come but invest in the wrong company and it could be wiped out in an instant. 

Foreign exchange 

The foreign exchange market, also known as the Forex, FX and currency market is the name given to the market trading in foreign currencies.

Forex Money for International Curency (Photo credit: epSos.de)

Thanks to home computer programs and increased awareness of the Forex market, its popularity has grown massively over the last few years. In fact as of April 2010, average daily turnover in global foreign exchange markets was estimated at $3.98 trillion. 

To make money out of the Forex market, you have to buy and sell currency at the most opportune times. Exchange rates fluctuate constantly due to various factors; military action, natural disasters, and political activity all have an impact on market confidence and therefore the perceived value of currency. 

Trading in shares can be lucrative but risky 

Large companies can use this to their advantage by executing payments or purchases when currencies are at the right levels. Even the smallest change in rates can have a big impact on large transactions. 

Individuals can make money on a smaller scale by buying up one currency and then selling it when the exchange rates change. The margins are rarely massive, but it can give you a bit of extra cash in your pocket. 

Commodity trading 

Commodity trading refers to the trading of raw and primary products and the speculation on their values increasing or decreasing.
Raw and primary products include corn, milk, soybeans, sugar, precious metals and crude oil. Each product can only be traded in certain months of the year, so becoming familiar with the process is crucial before you start trading. 

Money can be made by speculating on crop performances. For example, if there is a bad crop of sugar the price of sugar will go up. So buying sugar before the price increase and then selling when it’s at its peak will give you a profit.

Geopolitical factors can also influence the commodities market. For example, political instability in the Middle East can drive up the cost of crude oil. Or military action in a coffee producing country could affect that year’s crop, also driving up the prices.

As with shares, commodity trading can be long term – buying a product at a low cost and waiting for the value to rise – or short term, where the products are sold high and then bought back lower. 

Dealing in commodities is like trying to predict the future 

Whether you invest money in shares, foreign currency or commodities, they all revolve around speculation, risk and luck. Outside factors can dramatically affect each market, changing the value of your investment over night.
So whichever market you decide to invest in, do your research, and study the market and most of all never invest more than you can afford to lose.

Tom Reynolds, financial analyst at currency brokers firm, Currency Index. He analyzes the changes in yields and financial markets on daily basis, creating predictions on how different financial risk will change in the future that helps the company to hedge its assets and secure their clients’ investments.

The Do’s and Don’ts When Applying for Your First Bad Credit Loan

Loans (Photo credit: zingbot)

While it may be quick and easy to apply for a bad credit loan, you’ll first want to slow down and cover your bases before you rush into this type of cash advance. Bad credit loans are great options for getting you out of a bind, but you need to approach them in a responsible way in order to avoid falling deeper into a financial crisis. Consider these top do’s and don’ts before applying for your first bad credit loan:

Do apply for an easy payday loan only if it’s an emergency situation. You should reserve bad credit loans for dire situations such as an urgent medical bill or a car repair.

Don’t apply for a bad credit loan for a frivolous purchase. Be smart about the loan and don’t use it to pay for a big screen TV or a trip to Las Vegas. Using a bad credit loan is this manner is one way you could end up digging yourself a financial hole.

Do be in reality that you can pay back the bad credit loan in short order.  You want to to make sure that you are able to pay back your loan on time so that you don’t incur any extra fees or interest. Whether you need to cut back on unnecessary spending or borrow money from a family member, consider these options before you take out a loan and make sure to stick to them.

Don’t take out another loan to cover this loan! This can lead to a vicious cycle of never ending loans, debts, fees, and interest. Consider consulting the Center for Responsible Lending for advice on avoiding an spiraling financial situation.

Don’t overlook the terms of the cash advance. Carefully read the terms of any loan agreement to find out the exact payment terms (such as due date) and figure out any fees associated with the loan. By design, you are expected to pay back the loan and any fees by the next pay day. Failure to pay back your loan on time could result in hefty fees, expensive interest, and potential headaches.

Don’t borrow more than you need. Although it may be tempting to borrow more, resist the urge and only apply for the exact amount you need. If you’re already in a desperate money situation, you don’t want to unnecessarily rack up more debt.

Do get a job. In many cases, you need to have a job to qualify for a bad credit loan. Without proof of employment or employment records you could be out of luck. But all hope is not lost, if you don’t have have a job, get one, any one!

A bad credit loan can be a lifesaver in an emergency money situation, but you need to understand the penalties associated with failure to meet payment deadlines. Follow these do’s and don’ts to prevent yourself from creating an even bigger personal monetary issue.

ChloeMulliner is the Editor for creditsources.org , an industry leading authority site on credit related consumer services, personal loan options for people with fair, poor and bad credit, payday loans, emergency cash advances, credit cards and more.