There are plenty of examples of structured settlement buyers that participate in shady or unethical business practices, but the following guidelines should help you to avoid some of the major pitfalls when looking for a buyer.
- First, make sure you have all your paperwork in order. Keeping careful records of everything that has happened since the structured settlement payment was set up will help you and the buyer see eye-to-eye on the value of your annuity. Armed with this knowledge, you can make sure you are receiving a competitive quote.
- A reputable buyer of structured settlement payments will encourage the client to work with a lawyer to review all agreements made before signing over payments.
- The buyer should be able to provide valid references from previous sellers of structured settlements to ensure that the transaction was handled in a fair manner.
- The buyer should be able to walk the seller through the process of selling a structured settlement step by step, and explain what is expected from each party at each step of the process. This information should be obtained up-front before any paperwork is signed.
- Do not be surprised by the discount value of your structured settlement payment. Due to the eroding value of money over time from inflation, and the power of compound interest were that money to be invested, the value of an up-front payment will be much lower than the total value of your settlement payments. As a general rule of thumb, the seller of the structured settlement should expect to receive 50% or less of the total value of the settlement payments in the form of a lump-sum payment.
- With this in mind, do not be afraid to shop around for quotes. The value of lump-sum payments can still vary quite a bit from buyer to buyer. You may wish to use a broker to help you find the most competitive quote from a variety of structured settlement buyers.
- Finally, check with your local Consumer Affairs Office and the Better Business Bureau to see if any complaints have been filed against the buyer. If you use a broker, also check to see if any complaints have been filed against him/her or his/her company. If so, why? Weigh these factors in your decision to choose this buyer or broker.
There are plenty of examples of structured settlement buyers that participate in shady or unethical business practices, but the following guidelines should help you to avoid some of the major pitfalls when looking for a buyer.
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