Structured settlements are a way of settling a debt that became popular in the United States in the 1970s. Instead of paying personal injury claims, lottery payments, insurance claims and other financial obligations as a lump sum payment, structured settlements allow money to be paid in installments over a period of time established in the agreement.
Structured settlements are commonly used because it allows the payer to not have to transfer a large sum of money all at one time, and it provides the recipient of the money with a steady stream of additional income for the future. In some cases the recipient would rather have a large lump sum payment than future payments. In this case they can sell the structured settlement to a company in exchange for a lump sum payment.
Companies that buy structured settlements operate in different ways, so it is important to make sure you work with one that you trust to give you the best deal. Some companies buy your structured settlement with the intention of selling it to a bank for a profit. They are basically acting as a broker between you and the bank. Whatever money these companies make from selling your structured settlement payments is money that you failed to receive.
To avoid working with these companies that want to profit off of you, work directly with a bank. Working with a bank eliminates the middleman and can likely get you a better deal for your structured settlement payments. A bank also has a reputation to protect so they are less likely to give you a bad deal. For instance, AnFed Bank is a bank that buys structured settlement payments. AnFed is a division of BofI Federal Bank (Nasdaq: BOFI). Because BofI Federal Bank is federally chartered and FDIC insured, you can be confident that AnFed Bank will treat you fairly. They have a responsibility to the BofI Federal Bank shareholders.
Selling your structured settlement payments is a good way to get a large lump sum payment instead of relying on future payments. If you have a structured settlement but need money to pay down debt, pay for education, or make a big ticket purchase, selling your structured settlement can be your best option and working with a bank can help you find a reasonable deal.
