If you win the lottery, or you are awarded a settlement from a lawsuit, the entity that is supposed to pay you the money, may not be able to pay you in lump sum. The payment that you will receive are called structured settlements. This means that the money will be paid to you in installments for a number of years. You may, however, need to get access to the full amount of a large part of the payment at a given time. In this case, you can opt to sell the settlement and get the amount in full.

If you want to sell structured settlements, you will need to approach companies that undertake this service. You must realize that you will not get access to the full amount of money. There are several reasons for this.

The company buying the structured settlement, will give you the amount while they receive installments from the original payer.

This means that they are taking a risk due to future fluctuations of the economy. They have to factor this risk, so they may make some money from the settlement in the long run.

Secondly, whereas you were not expected to pay taxes on the settlement in its original form, the company that buys it from you will be expected to pay taxes for this. It is considered as an investment hence the taxes.

A structured settlement is a financial arrangement in which a claimant in a lawsuit agrees to resolve a tort claim involving personal injury by agreeing to a periodic payment obligation from the defendant. Generally, a defendant purchases an annuity from an annuity or insurance company that provides for scheduled payments as specified by the claimant and the claimant’s attorney according to the terms of the settlement.

These and other factors have to be considered when you are selling your settlement, therefore you should be ready to receive a lower amount. It is recommended that you go for financial counseling before you sell this settlement so that you are sure about your options in full. Take the time to research on this option and ensure that you make the most use of the money that you receive.

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