Friday, June 1, 2012

What is the process to get an advance for a structured settlement?

Getting an advance for a structured settlement can be a life saver. A person who wins the settlement from an injury or wrongful death suit may be awarded a large sum of money; however, people who are awarded this large sum of money may never have managed this much money before; therefore, laws have been passed so that people who are not used to this large amount of money is structured to be dispersed over a period of time. This prevents people from going on a spending spree if the money is awarded in a lump sum. The funds that were structured were meant to pay a person?s medical bills over a lifetime but sometimes people have a financial emergency and need the money to pay off debt.

Structured settlements are guaranteed payments of funds paid to the claimant or his/her family on a tax-free basis. Structured settlements usually are set up in monthly, annual, bi monthly, bi annual or in lump sum payments over a period of time. Sometimes there is a need for more of the funds to be available much sooner than the process takes to get a lump sum of money. If you are going through a factoring company to get a lump sum of money and need money right away there are some benefits when selling. Some companies are willing to advance at least $100.00- $1,000.00 once a contract is signed. Most factoring companies will also send a secured promissory note to be signed. This entitles the holder to pay back the advance out of the lump sum from the settlement once the case is settled. The drawback to getting an advance is, if the case is not approved then the money will need to be paid back out of pocket.

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