[VidSitePro id=104 ]one structured settlement cash now are you trying to cash out of your annuity not so fast welcome to the Chicago live show with your own jicama are you looking for cash to stay afloat you’re not alone there are those who have a need for money and will turn to some unusual places to get it selling annuities structured settlement scheduled lottery payoffs or other ongoing payments for cash became more popular during the recession but if you’re still feeling the cash crunch is tactic is a potential option unless the financial pre debt predicaments are dire most financial advisors recommend against cashing in annuities or structured settlements selling off an annuity can trigger surrender charges as high as ten percent and those who sell before age 59 and a half can also face federal taxes and penalties structured settlements are attractive because they generally provide tax free income for life yes sometimes cashing in is the only option that five hundred dollar monthly payment from an old accident may have helped with medical bills early on but if the beneficiary lost his job and fell behind on some bills or had to make some significant costly repairs to his home a lump sum payout of $50,000 may seem quite enticing Americans have a great deal of money tied up in structured settlements and annuity with a little less than 6 billion dollars worth of new structure settlements ridden each year according to the National structured settlement trade association at the end of 2013 there are around 30 4.8 million individual deferred annuity contracts in place exceeding 2.5 a trillion dollars according to the li mr a secured retirement institute a nonprofit research trade association for the financial service industry it’s my money and I want to know well some of the firms are one of the Lord’s largest buyers of structured settlement payments and annuities they handle more than two billion dollars in payment transfers between 1995 or in 2009 in 2009 chief marketing advisor of one of these firms ken Murray said that the company had seen a steady increase in customer inquiries following the economic downturn despite what was happening in the economy there were always people looking to sell annuities structured settlements and lottery winnings Mary said due to the nature of the business buyers of payments usually see customers when they’re in some sort of financial predicament quote historically the common denominator is people who need cash but there are some new reasons we’re hearing more frequently than others as a result of the recession it might be the fact that they lost their job or their mortgage payments have increased said Murray the firm declined to providing the update on whether inquiries were on an upswing some television commercials and advertisers may seem to imply that getting a quick cash payout under structured settlement or annuity is just a phone call away rather it’s a court controlled process that comes out the decision of a judge a phone call to an advertised 800 number is only the beginning of a lengthy process and a regulatory framework mandates that every single transaction go before judge who must decide whether the transaction can move forward the payee the structured settlement holder must provide that they have a legitimate need for the money and calculate the payout amount that they are requesting while regulations for annuities and lottery winnings can differ the payee can’t turn a structured settlement into cash simply because he wants a new car a nice vacation or an RV to tour the country in order to keep unscrupulous companies at bay most state laws also require that the transfer of the settlement rights be in the best interest of the payee how does it work when a structured settlement holder calls an agent and a team will review the settlement circumstances and reasons the applicant needs to cash if they decide to move forward they offer the Baen up from some to surrender the stream of payments along with a discount rate this discount rate which is typically between six percent and twenty-nine percent is comparable to the interest you would pay on a loan says grovyle cursory Collins man partners at the Collins law firm in Nashville Tennessee as such the lower the discount rate the better the deal quote you can negotiate Colin sense it’s not a ticularly the proposition and you can also shop around once you do cept in the office or offer however the company will find a file a petition for transfer the structured settlement in court in the state the company is in quote the judge is a final arbiter of whether it gets approved or not Colin says rulings are made based on among other things what the person needs to the money for well the discount rate is and the structured settlement company your reputation exact process has will vary in jurisdiction but from the time a payee calls to the time that they receive money can be a little as sixty two days or as long as 90 days Kahn says David Lewis senior vice president and general counsel for the stone creek capital LLC says few people sell their entire transactions at once payees usually sell a portion of their payments just enough to meet their financial needs and offers from companies are detailed and disclosed set of statements with discount rates and all the information they need to make an informed decision Lewis says other factors that go into determining the payment amount include in which state the payee resides the payment they want to sell and the size of the payment quote it gets pretty complex and we get it work regrettably has become more complex recently the amount is a function of many factors and these factors are more sensitive today and they might have been in 2008 says Lewis Lewis specifically points to insurance companies that have seen their credit ratings downgraded the cost of funds in capital has also gone up and developments throughout the credit market can have big implications on the structured settlement industry right after their 2008 banking crisis fear spread about the vulnerability of cash and assets kept in certain institutions despite the fear in bad press many people weren’t looking to cash in their payments in a panic that they wouldn’t be there Lewis says a judge also would be unlikely to accept that fear as a reason for selling payments anyway quote if someone old for that reason we wouldn’t do business with them and we’ll just tell them not to be worried we will be buying that a newly we would be buying that a new anyway so if we thought it wasn’t going to be good we wouldn’t be buying it in the first place says Lewis so I just want to reiterate the downside of cashing in your sentiments selling off an annuity can cost surrender charges of up to ten percent selling before age 59 and a half can trigger federal taxes and penalties thank you for watching this series on the Chicago live show please subscribe so that you can continue 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