Structured settlement payments are usually the result of a personal injury lawsuit in which the defendant’s insurance company funds the award amount with an annuity policy that provides periodic payments and ongoing income to the plaintiff. However, many people find the need to have a lump sum to aid in paying off debt or medical bills. A long-term stream of payments is not always the most beneficial method of receiving their award. A secondary market has evolved around structured settlements that allows consumers to sell all or a portion of their payments to a structured payment buyer. These buyers, or factoring companies, then pay the consumer a lump sum in return. In addition, other types of annuities, such as lottery winnings, are usually paid over time and can also be converted into a lump sum payment.
STRUCTURED SETTLEMENT LOANS
If you have won a lottery, a personal injury lawsuit, a wrongful death
suit, or workers' compensation case you’ll be awarded a large sum of
money and your payment will surely be set up as a structured payout. But
instead of having your payments stretching over twenty years you’d like
to have a lump sum of money right away especially when you have
problems like an unplanned emergency or job loss, need to pay college
tuition or purchase a business or a new house or just have to pay off
some debts. But what if you don’t want to sell your structured
settlement?Settlement loans (both post-settlement and pre-settlement) can be a lifesaver.
These loans are provided by structured settlement companies and you make
future loan repayments with the interest applied to the loan principal
according to terms. You don’t have to risk your assets for the loan,
you don’t have to concern yourself with background checks, employment
and credit history or even how you’ll have to repay the loan because
your settlement structure acts as the collateral. However, it must be
taken into account that court approval must be obtained and when you
apply for a pre-settlement lawsuit loan the lender company must review
documents regarding your case and speak with your attorney so it may
take about 90 days for the loan to be processed and funds distributed.
Also lenders will provide the loan based on a percentage of the actual
settlement and typically this will be somewhere between 70% and 90%.
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