Accident Settlements

Written by Michael Federico
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Accident settlements are often structured so that the payee receives regular payments over an extended period of time. While the total sum of the settlement might be substantial, the monthly or yearly payments might not meet the payee's financial needs. If that is the case, a person can seek the aid of a company or organization that buys structural settlements such as those awarded in accident cases.

Many people are under the impression that they cannot get money for future guaranteed payments. There is a federal law that requires court approval of the sale, but these approvals are fairly common. In fact, thousands of transactions involving structured settlements take place each year. Under the IRS' "Private Letter Ruling," the money that payees receive in sales often remains tax-free.

Finding a Company to Buy Accident Settlements

There are a number of reasons people sell off portions of their accident settlements. With the money they procure in the sale they might put a down payment on a new home, buy a new car, take care of college tuition, or pay off bills to get out of debt. However, when selling part of an accident settlement, it is important to work with a company that takes the time to develop a program that maximizes the current value of future payments.

It is not necessary to sell all future payments. On the contrary, a person should sell as few payments as possible. Companies that try to convince a person that he needs to unload everything are most likely only looking to make some extra money. There are buyers, settlement brokers, and direct funders that will work with their clients, figuring out the minimum sale that will allow those clients to achieve their personal goals.

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