Structured settlement companies, or factoring companies, trade lump sums of cash to people who have structured settlements from a successful lawsuit. If you want a large sum of money, and are willing to trade your future rights to more money, for cash now, then this might be an option for you.
There are many important parts of a negotiation for your payment rights. If you want cash for payments, don’t be so quick to sell. Do you know that if you do sell your rights to a brokerage company you will be transferring ALL of your future payment rights to them?
There is a reason that you see the commercials for structured settlement payment transfers on television all of the time. They are making a lot of money in this business. Most of these companies do business ethically, but you must remember that its in their best interest to get you to relinquish your payment rights to them. So no matter how friendly they may sound on the phone or in person ” theyre not your friends. They want your money.
So unless you are really on hard times or you MUST have the money now or the house will be foreclosed, it’s in your best interest, financially, to tough it out and keep your payments.
Structured settlement companies profit, in part, by paying people like you a lump sum of cash that is less than the discounted face value of your annuity payments.
It is common knowledge that many of the structured settlement companies have abused their consumers. Because of this abuse from structured settlement companies, now guaranteed favorable tax treatment is now at your disposal, if you wish to transfer your structured settlement payments.
In CA, the Structured Settlement Transfer, SSTA, says: (1) The seller must receive disclosures about their structured settlement payments, (2) notice to the Attorney General (3) court approval.
The transfer of your structured settlement payment rights will require the annuity brokerage or factoring company to file petitions in the county where you live. To grant the payment rights for approval, the court must find:
(1) the transfer is in the best interest of the transferor, taking into account the welfare and support of the transferors dependents;
(2) the structured settlement seller has been given the opportunity, in writing, to receive legal and financial advice and has received counsel or decided to waive it;
(3) the seller has received the disclosure forms;
(4) the structured settlement payment rights transfer will not interfere with court orders;
(5) the seller of payment rights understands the terms of the agreement and disclosure form; and
(6) the seller understands the right to cancel the sale and does not wish to do so.
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