People who have structured settlements have the chance to convert part of their payments to cash through selling. The approach involves making the necessary steps to legalize the transfer and result in receiving a lump sum. However, there are essential aspects to consider such as the timeline, court decision, and other formalities to get approval. For people seeking to utilize the approach, here are four common questions that can help you understand further structured settlements.
Question One: Timeline
One of the important questions asked by owners of structured settlement plans is the time it takes for them to get the lump sum. On the average, the process usually takes around 45 to 90 days. It is dependent on your ability to show adequate documentation that will support the approval process. Also, there is the court appearance and the judge’s decision. In the court, you should be able to prove your familiarity of the transfer and need for money.
Question Two: Similarities with a loan
A particular query that many people with structured settlements have is whether the process is similar to taking a loan. The straightforward answer is No. In a loan, financial institutions usually ask for either collateral or supporting documents that will give the assurance of payment. With the sale of structured settlements, there is a process of transfer wherein you ought to receive a lump sum for an owner of a specific and time-bound structured settlement payout.
Question Three: Tax Obligations
Another question that people might have over a structured settlement payout is whether they are obligated to pay taxes. The answer to this question is that it is not taxable. The basis comes from Section 104(a)(2) of the IRS code that details how taxation does not cover money coming from personal injury payments. So when you sell part of the monthly payments you receive from a lump sum, there is no need to worry about tax-related issues.
Question Four: Denial of Sale and Reapplication
People seeking to sell structured settlements for a lump sum can also experience rejection from the courts. They ask the question what is next. Is there a possibility for reapplication? The answer is yes. Although the court denied your request, it means that there are certain conditions not met. Among the reasons for denial include the inability to show urgent financial need, limited understanding of the transaction or the interest favors a party over the other.
When your request is turned down, you can always ask the judge for the basis of the ruling. Use the information as the basis to make corrections and reapply again. When you have sufficient documentation to show the urgent need for money, then the judge can quickly grant the transfer request.
Overall, selling structured settlements is an alternative way for people to get the money that they need. We cover more of this at structuredsettlement.us.com. The questions and responses above are significant points to consider in understanding the process and meeting legal requirements. These points can help you get the approval at the quickest time possible and support your financial needs. Read more about this topic at http://vhost4.bc.edu/content/dam/files/schools/law/bclawreview/pdf/51_1/02_polsky_hellwig.pdf,
Do you have questions about structured settlements? Before selling yours, learn more on what you should do and what you should not at structuredsettlement.us.com.