The answer here is yes – and 47 states have laws in place regulating selling structured settlement payments for the protection of both the seller and the buyer. Three states – New Hampshire, North Dakota and Wisconsin – do not currently have any regulations governing structured settlement sales. However, it is still possible for residents of these states to sell their structured settlements to a funding company and have that transaction carried out under the laws of the state in which that company or insurance carrier is domiciled.

When you sell some of your future payment rights for a cash lump sum payment, you are transferring the rights to those future payments to a third party otherwise known as a factoring company. This is known as a Structured Settlement Transfer (SST) or structured settlement factoring transaction.

A factoring company such as CBC Settlement Funding will provide the annuitant or payment recipient with cash today in exchange for a certain number of future payments. For individuals who find structured settlements too restrictive, having the flexibility of accessing their future money now is a viable option.

It is perfectly legal to sell some or all of your future annuity payments for cash. When it comes time to sell these payments, forty-eight states and the federal government has enacted additional consumer protection statutes establishing strict conditions when an annuitant sells some or all of their future payments.

Aside from the fact that you must be of legal age and of sound mind and judgment, the only requirements that the seller of a structured settlement or annuity payments must have is:

Evidence of the benefit through a settlement agreement or annuity contract
Proof of identity
Approval from the court

Other requirements for a structured settlement sale are set forth under the Internal Revenue Code. Beyond this, however, there are no particular requirements or qualifications that one must meet in order to engage in this type of transaction.

The present value is how much your future money is worth in today’s dollars. Think of it as reverse compound interest; where instead of determining the amount you would need to invest now in order to have a specified balance in the future, you’re looking at the future balance and determining the value in today’s dollars.

When you sell your future structured settlement payments to a factoring company, they will determine the present value of your payments using a mathematical equation. This equation uses number of years, interest rates as well as inflation rates to make that determination.

Not researching the company first– Do your homework and research the company before getting a quote. Check with your state’s Attorney General’s Office and look the company up on the Better Business Bureau’s website to see if they’ve had complaints about their business practices.

Taking a verbal offer – Get a concrete written offer. If the company won’t put it in writing go elsewhere. Reputable firms always give written offers.

Not reading your paperwork – Sometimes companies will hide their fees or other costs. It is important to know what you’re paying and why before you sign. If you don’t understand the wording ask or get advice from an independent third party.

Getting only one quote – If you don’t shop around you may not get your best offer. Don’t rush into a transaction with the first or only offer you receive.

Going with someone you don’t trust – If your representative gives you a run-around or won’t take the time to explain things, they may not have your best interest at heart. Go with a company that respects you and provides top-notch customer service.

Letting emotions cloud your judgment – Just because your financial situation is pressing doesn’t mean you should make hasty decisions. Do your homework and make an informed decision.

Not showing up for court – It is always in your best interest to go to court to explain your situation to the judge. Don’t let others determine your fate.

Consulting with an attorney or financial advisor about the sale of your structured settlement is a smart move. It also gives you a chance to ask questions and clear up any doubts you may have about the process.

The factoring companies that buy structured settlements often have legal professionals on staff. Still, just as you might seek a second opinion after receiving a medical diagnosis, you also should review documents or questions with your own attorney before committing to a structured settlement sale.

There is another reason to have an attorney involved. Regardless of the circumstances or the nature of the structured settlement, the transaction will need to be reviewed and approved by a judge in a court of law. A very good reason for this is that structured settlement transactions that are not approved by the court are subject to a whopping 40 percent federal excise tax.