Are you in the difficult position of needing to buy a car, but you do not have the cash (or credit) to get one right now? You have one asset – your structured settlement from a personal injury lawsuit – but that money comes to you in incremental payments from an annuity. And you are wondering: is it possible to get a lump sum for your future structured settlement payments and use that money to buy a car?
The short answer is yes, you can – as long as a court approves a transfer as an urgent need.
It’s happened to many of us. That hand-me-down pickup from your dad starts to cost more in garage bills than it’s worth. That job opportunity is perfect, but it is 30 miles away, and public transportation is nowhere close. That four-door that got you through school has one too many rust holes and is starting to sound like an overused bus. You need a dependable ride but can’t afford one right now.
Sound familiar? If so, there is an option to sell some or all of the future payments from your structured settlement. You will not get the full amount of the payments, but you can get a reasonable rate and the money you need to be back on the road in a safe and dependable vehicle.
How much money will I get?
Well, you won’t get the full dollar value of your payments. But with historically low-interest rates, you should be able to get a discount rate below 6% for 10-year payments. Compare that to other options:
- You could get a payday loan, which may cost you 400% annual interest.
- You could find an unsecured personal loan. If your credit is fantastic (700+), you might be able to get 6% interest. But for most of us, loan rates are between 6% and 35%.
Selling your future payments will cost you money, but generally much less than other options.
Are there legal constraints?
Yes. Both federal and state laws govern the sale of structured settlements. To be permitted under federal law, the sale must be in the best interest of you and your dependents, and it cannot violate another court order or any other law. The court in the appropriate state jurisdiction must approve an individual’s sale of a structured settlement in advance. Each state then has its own rules regarding the sale of a structured settlement. Generally, annuitants are legally able to sell their future structured settlement payments if they are facing an emergency or otherwise need an immediate lump sum of cash.
Here’s the bottom line: If you’re interested in selling your structured settlement to buy a car, your individual situation will dictate whether you can legally do so. The best next step is to consult with an expert to get advice.
We welcome you to contact CrowFly if you’re thinking about selling your structure. Our team is all about educating those we speak with; there’s no obligation to choose our services if you contact us. A trained professional can talk about your situation and goals, explain the laws that apply to you, and help you decide on the best next step. Visit crowfly.com or call (888) 560-6629 for more information.