It's true. You can sell structured settlements without going broke. But to do this effectively, you have got to know a few additional truths as well as dispel some myths and fabrications along the way.
So here I'm listing a few facts and false claims surrounding the field of selling structured settlements so that you are more familiar and capable of differentiating between what is true and what is outright erroneous or inaccurate when it comes to selling your payments rights.
Being knowledgeable of the facts will have make a more informed decision and do what you deem right and sensible thereby sifting through the noise and separate the wheat from the chaff.
MYTH: You will pay taxes if you sell structured settlements even though you are exempt of paying income taxes on your periodic payments as long as you hold the settlement.
FACT: you do NOT pay taxes when you sell a structured settlement if you did not have to pay taxes on the settlement money before cashing out for a lump sum.
As a rule of thumb, if you have to pay taxes on structured settlements - i.e. Non Qualified Structured Settlements, such as structured compensatory payments for an unfair and discriminatory lay-off - then you will pay taxes also on the lump sum cash out.
Conversely, if you did not have to pay taxes on the structured settlement, a lump sum transfer will not change its status in this regard.