How To Get the Best Price When Selling Your Structured Settlement
The IRC 5891, a bill that the Congress passed requiring that all structured settlement factoring transactions be approved by a state court also instituted that structured settlement factoring transactions are priced using a discount rate to calculate the present value of the payment stream. It means that you will be selling your structured settlement for less than what it’s worth. Discount rates can range from 8-18% depending upon many factors including the payment stream, funding company, and court costs .
This is why it is important for you to be extra careful when making a decision whether or not you want to sell your structured settlement. Some companies low-ball and adjust the quote if the seller receives a better offer from another company. There are even dirtier tricks like “interest drag” which prolongs the court process to increase their revenue via the per diem.
In order to protect your interest, below are some tips you can follow to ensure you are getting the best possible value for the sale of your structured settlement.
Better Business Bureau
Before you even begin contacting a company, check the Better Business Bureau record. If the company has less than five complaints, it means they are decent company.
It will also help if you google the company and ask friends and friends of friends if they have ever dealt with this company. Check if they have ever filed for bankruptcy or if there is anyone who has talked about them on blogs or forums.
Know Your Worth
You will not sell your house unless you know how much it is worth, right? The same principle applies on your structured settlement. Remember that it is also a property and you live off it. You have to make sure that the offers you get are as close as possible to the real worth of your structured settlement if not more.
Just take into consideration the required discount that the law applies. There are calculators available for you to get an estimate of your structured settlement.
Get as many quotes as you can but it is advisable to not let the companies know what other companies you are talking with and how much they are quoting. This will allow you to better determine which companies are being honest and are looking out for your interest.
Require full disclosure
Some states have enacted the Model State Structured Settlement Protection Act which requires all companies to clearly layout the terms of sale to the buyer including the number of payments, the discount rate used by the company and any charges applied for breach of the agreement. There are states that also require legal services.
Check the federal law and never operate outside of it.
- Tips on Selling Structured Settlement Payments
- Selling your structured settlement? Be very cautious.
- Discount Rates and Structured Settlements
- Should I sell my structured settlement?
- The History of Structured Settlement Factoring Transactions