A structured settlement refers to a financial scheme, typically employed in settling a personal injury, wrongful death, medical malpractice and other tort claims. The financial system creates a future income stream guaranteed by the insurer over a pre-determined time. During their genesis, structured settlements ended up being painted with a broad brush and resulted in a rigidly inflexible payment plan. Demand for immediate cash led to the rise of factoring companies in the early 90’s that could acquire payment rights under a structured settlement in return for a tax-free, one-off lump sum award. By selling a portion or all of the structured settlement payment rights offers financial liquidity to tort claimants who encounter economic hardship down the road.

Lawrence Patterson holds a structured settlement which bestowed monthly payments of $5,500 and five annuities cashable in future. Rather than wait for payment over a long-drawn-out time in future, Patterson sought to reclaim a one-time lump sum payment to cover urgent financial demands. Like lottery winners receiving money through a financial plan with periodic plans, he could sell the structured settlement but in conformity with the legal framework. Although the court partakes in the transaction, the process has fewer bureaucracies than a full-blown lawsuit. The judge stands in the way to protect tort claimants from unscrupulous companies that charge usurious discount rates.         

Sell Structured Settlement

Was Patterson’s Petition to Sell Up to Scratch?

Patterson got in touch with a reliable factoring dealer after calling several structured settlement purchasing companies and requesting for quotes. The buyer of annuities knuckled down to assess the proposed transfer for eligibility. After answering a set of questions, he got informed he could secure court approval. His transaction had to be sanctioned by a court based on the “best interests” statutory test and fair discounting of the assigned payments.

What factors influence the amount of money recoverable after selling his payment rights?

Companies that buy annuities factor in various items to work out the lump sum payment sellers receive. Novation experts consider the amount and time of payments, in-house costs of funding, servicing fees, court filing costs and obligations arising from transferring interests under court orders. Patterson received a consumer disclosure that unveiled the discount rate, net lump sum and all expenses deductible from his yield.     

What does the court process entail?

Structured settlement annuity companies provide assistance on the legal procedure by compiling and filing all relevant documentation in court. The company also served interested parties with the court hearing date and venue. The next step involved lodging a petition in the circuit court of his County. With years of expertise in court canvassing the sale of structured settlement payments, buyers of annuities render assistance to ensure all documents have been filed. Once his transaction got approved and a final review by the judge was done, Patterson received his funds. The company also followed up to ensure Patterson reveled in the transaction; he told them he felt indebted to all employees who had all hands on deck until he received his lump sum. Patterson also contemplated selling to the company other payment rights in future. 

What Considerations should Payees make before entering into a factoring transaction?

Start by familiarizing yourself with your state’s structured settlement protection Act. A vast majority of states have flexed their muscles making the laws more stringent due to industry malpractices by unscrupulous factoring companies. Revised versions of the procedural rules now make it mandatory for the payee to appear in court on the hearing date, be admonished to seek independent professional advice and receive a disclosure statement with the right to rescind. Payee transparency will win you courtroom sympathy like Patterson; however, you don’t need to behave obsequiously before the judge.   

Top 3 Moneymaking Buyers of Structured Settlement Payments

JG Wentworth provides each structured settlement payee with a personal representative to address their needs with specificity, undertakes the paperwork on their behalf, and ensures your application gets approved by a judge within the shortest duration.

Peachtree Financial Solutions will craft a transfer agreement together with all disclosures for review in a few days, forward your transaction to a seasoned attorney who seeks court approval and consummates your transaction with a lump sum payment in less than two months. 

Stone Street Capital is among the renowned buyers of annuities to bid with an unrivaled price offer, levies modicum fees and handles each transaction with a personalized touch. The company has a post-factoring follow-up after disbursing payments to ensure full customer satisfaction.