Sell Annuity Payments and Keep Cash Flowing, Part II
- This was posted on February 24, 2009
In the last post we talked about not only on the state of the economy, but the state of the nation’s morale in terms of finances. It’s difficult to turn on the television or open a paper without reading yet another story of a family in crisis; millions of Americans have been affected in some way by the economy whether through a loss of a job or even the loss of their home. It’s hard enough to keep cash flow positive at the moment as salaries remain stagnant and prices continue to escalate; and with most of us operating without a safety net we are only one or two paychecks away from financial disaster.
As we discussed, however, for those who are receiving structured settlement payments on a regular basis, their safety net rests in the ability to sell annuity payments. Structured settlements, detailed by the court system when a claimant is awarded money in a personal injury settlement, pays out on a scheduled basis from money that is kept in an annuity. These payments are ongoing until the total of the cash award is satisfied.
When a recipient chooses to sell annuity payments they trade future payments for present cash. A buyer of structured settlement annuity payments will take ownership of the number of future payments sold and the seller will receive their money today. So, for instance, if a seller decides that three payments worth of money will help their current cash flow they will sell three future payments. The buyer of structured settlement annuity payments gives the seller the agreed upon price so that they have cash in hand. The buyer then receives those three future payments. This allows those who sell annuity payments to keep their cash flow active without having to sell the entirety of their structured settlement.
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