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FREQUENTLY ASKED QUESTIONS

 
What is a Structured Settlement?
Who is responsible for making the ongoing settlement payments?
Are structured settlements used only in large cases?
Why do annuitants cash-in their future payments?
How much will I receive for my future payments?
How long will it take to receive my money?
Why is court approval necessary?
Do I have to pay taxes on the proceeds from the transaction?
How will I be paid?
Does every state allow me to sell my Lottery winnings?
Yes, I do need cash, how do I get started?
What if you have sold some of your structured settlement payments in the past? Can you sell more now to a different purchaser?
Can you sell just some of your structured settlement payments or do you have to sell them all?
 
What is a Structured Settlement?

A Structured Settlement is an arrangement where a settlement from a personal injury or wrongful death claim is paid out over time, such as monthly, annually, in lump sums, or some combination thereof.

Who is responsible for making the ongoing settlement payments?

After a settlement agreement is made, the defendant or responsible party (the “annuity owner”) will purchase an annuity contract from a life insurance company (the “annuity issuer”) to fund the structured settlement. Although the annuity issuer will be the party actually making the payments, the annuity owner will remain responsible for making sure the payments are made.

Are structured settlements used only in large cases?

No. Although structured settlements were originally designed for the settlement of cases with catastrophic damages, they are now used in both large and small cases. The insurance industry markets annuities and structured settlements as a means of settling cases with settlement values as little as $5,000.

Why do annuitants cash-in their future payments?

Typically, people who choose to sell some or all of their structured settlement payment rights do so because their financial situation or other circumstances have changed since their payment schedule was first established. For example, they may want to start or expand a business, buy a house, pay off debt, medical expenses or pay for education.

How much will I receive for my future payments?

There are several variables involved in determining how much you will receive. The key factors in determining this amount are: how many payments you would like to sell, how much these payments are worth, how far in the future the payments are due, the risk of the insurance company not paying, and current interest rates. Freedom Financial Solutions will take a look at all of these factors and create a customized quote which is tailored to your financial needs. We will also explain the time value of money to you in detail when you receive your quote.

How long will it take to receive my money?

Many factors affect the time to complete the transaction. The initial contract and underwriting process can be completed rather quickly, within a matter of hours or days. By law, it is required that a court review and approve all structured settlement transfers. We will file the required papers with the court as quickly as possible. The efficiency of courts in different states and counties varies widely, therefore, we cannot promise a date when the court system will schedule your hearing or approve your transfer. However, we can promise that we will do our very best to expedite the process whenever possible. A structured settlement transaction normally takes 30-90 days from contract to funding. Of course, your cooperation in submitting all documentation to us in a timely manner will help avoid unnecessary delays. Freedom Financial Solutions will work with you and the courts to make the process run as smoothly and as quickly as possible.

Why is court approval necessary?

The majority of the states have enacted a model Structured Settlement Protection Act which requires an annuity recipient to obtain a court order approving the assignment of structured settlement payments. These laws were passed in order to protect you and make certain that the transaction is in your best interest.

Do I have to pay taxes on the proceeds from the transaction?

As long as the original structured settlement payments were tax exempt, the sale of the structured settlement payments does NOT create any tax liability and the purchase price which you receive will not be taxable.

How will I be paid?

Cashiers Check or Wire Transfer. You make the election.

Does every state allow me to sell my Lottery winnings?

Currently California, New York, Texas, Florida, Pennsylvania, Ohio, Michigan, New Jersey, Arizona, Colorado, Oregon, Wisconsin, Washington, Washington D.C., Connecticut, Vermont, Maine, New Hampshire, Ohio and West Virginia are the only states that allow winners to sell their prize money.

Yes, I do need cash, how do I get started?

Simply call Freedom Financial Solutions at 1-877-227-4354 or fill out the quote request form to get started. Please make sure to provide a number that we can reach you at in order to deliver the quote to you and start your personalized solution.

What if you have sold some of your structured settlement payments in the past? Can you sell more now to a different purchaser?

Yes. If you have sold some of your structured settlement payments in the past you can sell any remaining payments to which you are still a payee. However, if the original purchaser request a right of first refusal and you agree to it, you must allow him to make you an offer before going to another purchaser.

Can you sell just some of your structured settlement payments or do you have to sell them all?

You can sell some or all of you payments. If you only sell some of your payments your insurance company will continue to pay you the payments you still own when those payments are due. The payments you sold will be paid to the purchaser when they come due. That’s why the payment price represents a discount — be-cause their value to you now is greater than their value to the purchaser when they come due. The purchaser will base his offer on what the value of the pay-ments will be when he receives them.

Other Resources
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