Did you know that only 39% of Americans can afford a $1,000 emergency expense? Not everyone has the ability to save up money after their necessities are paid for. In fact, many live paycheck to paycheck.
If you run into a financial emergency but have a structured settlement, it can be life-saving. You can receive cash for structured settlements to combat a financial issue. Read on to learn more.
Selling a Structured Settlement
If you want cash for structured settlements, you will have to sell all or a portion of your payments. The best way to make this happen is with the help of a financial advisor or attorney.
These professionals will help you find a reputable factoring company that protects your interests when selling. Rightway Funding can provide you with the cash you deserve.
The sale of a structured settlement requires approval from a judge. The judge will determine how the sale will affect your long-term financial situation by considering the terms of the sales. They’ll take the following into account:
- Living expenses
- Future financial obligations
- Life expectancy
The judge will also focus on the type of sale; selling some of your payments, a portion of each payment, or the entire structured settlement. This long process can take up to 60 days to complete.
Structured Settlement Worth
Technically speaking, your structured settlement is worth whatever your current contract is valued at. However, the value of your contract is not what you will receive when selling your payments.
A factoring company will calculate your present value and subtract the growth potential from it. They do this because the company won’t have the money to invest immediately when buying future payments.
A factoring company will also calculate a discount rate that they charge for inheriting the risk of a structured settlement. Generally, this rate falls between 9 and 18%.
A lot of calculating goes into how much your structured settlement is worth. Using a structured settlement calculator is not going to provide you with the full value because every contract is different.
Benefits of Selling a Structured Settlement
Along with getting cash for your structured settlement, there are other benefits to look forward to. When you sell a structured settlement, you take advantage of liquidity most of all.
Structured settlements are made to protect you financially over the years. However, you might come into a situation where you need cash ASAP. Having a structured settlement that you can sell comes in handy.
It’s not easy to decide between immediate needs and your future security, so it is essential to make the best decision for your specific situation.
When you opt for cash for a structured settlement, you’ll receive a lump sum of money instead of waiting for your periodic payments. Many find this reason enough for selling.
Cash for Structured Settlements: Should You Sell?
Although selling your structured settlement comes with a lump sum of money, the process takes longer than some are willing to wait. If you need cash for structured settlements, selling is not a bad option.
To ensure you are making the right decision and find the right factoring company, hire a financial advisor or lawyer for help.
For more financial advice, read the other articles we have posted on our blog.