Ask the Expert: Why should I sell my payments?
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Q: Why should I sell my payments? Couldn’t I just use structured settlement payments as collateral for a loan?
Q: Why should I sell my payments? Couldn’t I just use structured settlement payments as collateral for a loan?A: Unfortunately, you cannot use your payments from a structured settlement as collateral for a loan. The Federal law that provides these payments on a tax-free basis prohibits their use in this manner. Luckily, they do allow you to sell some or all of your future payments for a cash lump sum payment so you can use the money for emergencies, down payments on homes or to buy a car. The Federal government also enacted legislation that protects the seller’s best interest throughout the transaction.