Structured settlement factoring means selling out structured settlement for a lump-sum cash payment. The process describes the transfer of structured settlement funds along with legal responsibilities, rights and liabilities to another person in exchange for cash. According to the agreement, the buyer and the settlement holder enters into a contract wherein the buyer assumes all the responsibilities of the settlement and make a reasonable payout to the seller.
Why do people go for structured settlement factoring?
If the holder of the structured settlement become physically impaired due to an injury and is unable to work, he can go for settlement factoring. Similarly, a person who becomes a victim of malfeasance can opt for structured settlement factoring. In this way, the individual will have sufficient funds at his disposal without worrying to work in order to make a living.
This type of factoring is similar to factoring used in businesses. Just like businesses sell their receivables to factoring companies to get quick cash, individuals holding structured settlement can sell their settlement at a discounted lump sum price. Thus, settlement factoring is a quick way to get instant money at discounted price. Many companies buy structured settlement at a discount of 10 to 20 percent as agreed upon with the seller. However, various factors must be taken into consideration before selling structured settlement to any company.
First and foremost, determine the reason for structured settlement factoring. Why do you want to sell your periodic payment for quick cash at discounted price? There could be many reasons as to why a person will sell his structured settlement. If you have a genuine reason that warrants big money in less time, going for factoring might be a wise decision.
Next, decide how much amount you need. If you do not need the entire settlement amount, sell only a portion of your settlement. On the other hand, selling the entire settlement will be a better bet, if you need quick finances for investing or for reimbursing major bills. Once you are done with these steps, hunt for companies that render structured settlement factoring services.
Obtain detailed quotes from different companies in order to get a fair and better deal. Check out the background history of all companies and ascertain their legitimacy. Now, compare the lump sum amount offered by each company, and read their terms carefully to avoid any kind of issues at a later date. After evaluating different companies, choose the best structured settlement factoring company that offers a better deal.