Structured settlements are made for any number of reasons, including payouts from insurance companies for injuries or other claims and the like. Settlement amounts are structured for good reason – if a company had to pay out a large amount of money immediately (a lump sum payment), it could easily cripple the company. By putting the settlement into a structured payment format, you receive the financial compensation you’re due and the company avoids undue financial stress. However, we all know that there are times when the money from a structured settlement just isn’t enough.
When you realize that you’re not making enough from the settlement to cover your expenses, it’s tempting to look into selling it outright so you can get a lump sum payment. However, you might find your paperwork contains anti-sale language. In effect, this is legalese that “prohibits” the sale or transfer of the structured settlement to another party. Is that the end of your quest? Actually, it’s not.
Don’t Let It Stand in Your Way
First, understand that most structured settlement agreements contain some type of anti-sale clause. They’re put in there as a form of protection and limitation, but they’re not set in stone. Just because your settlement papers say you can’t sell it, that doesn’t make it so.
The Judge Has the Say
All structured settlement sales have to go before a judge for his or her approval. The judge has the final say on whether a settlement can be sold at all. Moreover, he or she can decide that if your need is genuine and the sale meets all pertinent criteria, the anti-sale clause is void. So, if you have a compelling case for selling your settlement and you do your homework where buyers are concerned, you have an excellent chance of getting the judge to approve the sale even with the language in the paperwork.
The Most Important Takeaway
While you might think the good news about anti-sale language not limiting your ability to sell your settlement is the most important takeaway from the information above, that’s not the case. The most important takeaway is that the judge has to approve the sale. There’s no guarantee that he or she will do that. You need to build the most compelling case possible that selling your settlement is in your best interests. And, no, what you consider your best interests and what the court considers your best interests are not necessarily the same thing.
It’s important to start with the foundation – genuine need. If you’re trying to sell your settlement to buy a vacation home or a new sports car, you can bet you’ll be denied. However, if you have genuine financial need, you’re off to a good start. The next most important thing is to ensure that you’re working with a qualified buyer. Some buyers aren’t on the up and up, and if that comes to light when the judge investigates, the sale will be halted. Work with a reputable buyer and have you have a better chance of getting approval.