Do Your Research Not To Get Into Trouble With Structured Settlement Investing

by G. M.

May I be allowed to add my "10 commandments" for taking part in a structured settlement investment deal?

1. First thing, make sure who you're dealing with. If you've contacted or been approached by a secondary structured settlement seller with a pitch to invest in a product that will "yield high returns and is guaranteed," ask: are you the originator company who purchased the structured settlement from the original owner of the payments rights; or a broker for the company?

2. Needless to say, whoever in charge, check out their credentials, history and standing. Check their backgrounds for possible claims and misconducts; check their status and affiliations with appropriate agencies. I can't stress this one enough: DO NOT DEAL WITH QUESTIONABLE PARTIES. You can lose your money and get into trouble.

3. Never negotiate for less than getting a full, detailed and absolutely easy to read and understand disclosure pointing out all your rights, agreements and commitments. How much in terms of money will you get. That means precisely that: how much will I get? Ask for the numbers, before and after all the expenses, commissions and fees for brokerage, transactions, attorneys and all kinds of legal fees. Read over all the documents carefully; do take the time for it and don't let yourself get tired out and easily submit. It is that much important. Do not neglect this part, because once you agree and sign it will be to late and you can possibly oblige yourself to something you can afford. Ask that your name, earnings and benefits should be clearly written in the contract. This is even more important when dealing with a secondary broker.

4. Determine there are no legal problems, liens, tax liabilities by the original owner, etc. whatsoever, effective or potential, existing or lingering over the structured settlement sale. Do not just take their word for it; definitely do your own research and get advise from an attorney if necessary. You don't want to sign an agreement buying a structured settlement and then find yourself in legal trouble that may also cause you to lose your investment as well as pay for attorneys that will reduce your returns.

5. Don't let yourself be pushed into the deal. Do not agree to purchase a structured settlement now. Take your time to think over all the relevant aspects and avoid possible troubles before they hit you. Don't jump into anything. Brokers especially may be eager to close the deal; however, resist the pressure and don't agree on anything before you have checked everything out thoroughly and are convinced you have a good deal at hand free of any troubles. I want to insist again on the importance of finding out who you're dealing with and if possible, contact the originator company (make sure it's OK to do so) and verify all the details involved in the investment: the buyer, the price, the earnings, the possible obligations.

Structured settlement investments are great in some aspects. They may be viewed as fixed and secure; they may have higher yields than other kinds of investments especially more risky investments; they may have less fees to pay (think about variable annuities as a comparison!) than other products, but the most important think is that you are careful from the beginning to ensure that you get what you are offered and do not fall into any problems.

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Jul 31, 2014
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Invest Only In Completely Ethical and Legal Settlements
by: Anonymous

The downside of the original structured settlement buyer is that the costs, court sessions and so on are on his part. On the other hand, if you are farther down the line, thus dealing with an intermediary as an investor, you are facing other headaches and potential problems if you are not very careful and do your research ahead. For example, what happens if the original buyer did something wrong, fraudulent, or unethical; solicited the seller in some unfair way, evaded the court process (subject to a 40% tax penalty!), falsified documents, or the transfer was problematic because of restrictions in the original structured settlement agreement. In all these cases, you can get into trouble even though you are not the original buyer. Even if you are not the one to be blamed, but you can end up paying legal fees and having to deal with all the mischief. So, it's worthwhile to do your research on the transfer itself, all involved people, the broker, the seller, the buyer, or buyers, other investors, and deal only with something that is surely straightforward, legal and ethical in all aspects to spare you trouble down the road.

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