Before discussing structured settlement funding, it is important to first understand what a structured settlement actually is.
Structured Settlements Explained
Structured settlements are most often awarded in personal injury, medical malpractice, or wrongful death cases. Instead of receiving one large lump-sum payment, claimants get scheduled payments over an agreed period of time. Additionally, these payments are typically tax-free, providing a financial advantage for the recipient.
Moreover, they are usually guaranteed by an insurance company through a secure annuity.
Moreover, they are usually guaranteed by an insurance company through a secure annuity.
Structured Settlement Funding Explained
Structured settlement funding allows you to convert future settlement payments into one upfront lump sum of cash. In this process, you sell some or all of your scheduled payments to a funding company. As a result, you can access a large amount of cash quickly, rather than waiting years for payments. This funding comes from your settlement before your regular payment schedule is complete.
Here’s why someone might consider structured settlement funding:
- To cover significant or unexpected expenses: Things like medical bills, home repairs, car trouble, debt repayment, business, or tuition.
- To address financial hardship: Structured settlement funding can provide the necessary liquidity to resolve the issue.
- To avoid other types of loans: Like high-interest credit card advances or other loans. Someone might choose to access their structured settlement funds as an alternative.
How it works
- You choose a portion (or all) of your future payments to sell: You decide how many payments you want to convert into a lump sum.
- You find a structured settlement funding company: These companies specialize in purchasing structured settlement payments at a discounted rate.
- You get a quote: The company will offer you a lump sum amount, which is less than the total value of the payments you’re selling, reflecting a discount rate.
- Court approval is required: A judge must approve the sale to ensure it’s in your best financial interest, especially considering the long-term impact on your income.
- You receive the lump sum: Once approved, the funding company pays you the agreed-upon amount.
Important considerations
- You will receive less than the full value of your payments: The funding company profits by purchasing your payments at a discounted rate.
- It’s a sale, not a loan: You are permanently giving up your right to those future payments in exchange for immediate cash.
- Court approval is mandatory: This helps prevent predatory practices and ensures the decision is made thoughtfully.
- Consider alternatives: Explore selling a smaller portion of your payments instead of selling your entire settlement. The choice is yours.
In essence, structured settlement funding lets you access your future payments early. You decide whether to sell part of your payments or the entire amount. This approach delivers one lump sum, giving you immediate financial flexibility.
First Capital Is The Number One Choice For Structured Settlement Funding
First Capital helps you get a lump sum of cash by buying your future structured settlement payments. We buy partial settlement payments or the entire settlement, depending on your needs. Our goal is to give you more options to access your money quickly. This way, you can spend it when and how you need to. Contact Us for a free consultation.