First of all, we DO NOT solicit our own clients to sell their structured settlement payment rights.
So rest assured members of the judiciary, plaintiffs and plaintiff attorneys...

(1) we won't be mass mailing or blast emailing you, your clients or annuitants with the latest "spin du jour" on the subject.

(2) We also do not violate confidentiality or privacy provisions in settlement agreements on cases in which we have previously been invited to participate by sharing confidential case documents with factoring, settlement purchasing or settlement transfer companies.

(3) Should someone contact us with questions concerning a structured settlement factoring transaction we will do our best to understand their situation, examine alternative options. Please note that If the original case was resolved in Bronx County New York, and we participated in the placement of the structured annuity, having signed a Structure Broker's Affidavit, under the new Court rules designed to protect profoundly injured people, neither we (nor any other placing broker) could speak with you on the subject unless authorized to do so by the Court. If, in the end, a structured settlement factoring transaction is the only remaining option, and sometimes it really is, we do NOT take any compensation for any referrals. Factoring is an unregulated industry in terms of compensation. Unlike the sale of insurance products where compensation rates have to be filed by annuity/insurance issuers with state regulators, there is currently no licensing, training or statutory accountability required to receive compensation for a factoring referral. Any compensation that any broker chooses to receive for such a referral would serve to reduce the amount that the unfortunate seller receives. We don't believe in effectively taking money out of a desperate tort victim's pockets. Others may not feel the same way. Make sure you know who you are dealing with.

Things to consider if you are contemplating factoring: Your situation my have changed since you settled your case in which the structured settlement was created, BUT, is it in your "best interest" to sell your rights to structured settlement payments? While unrealistic ads showing beachfront homes with infinity pools, "six figure" cost sports cars and boats, fanned out wads of cash and people "shouting from balconies" living the high life which seem to be a staple of factoring company advertising , the answer can be arrived at only after careful thought and analysis. Have you gone through a lot of your cash due to poor money management or bad investments? If so, perhaps you already benefit from the discipline, steady flow of cash and spendthrift protection that the structured settlement provides. Perhaps your situation has changed somewhat, or you have an emergency medical condition that hasn't been provided for by insurance. But have you exhausted all of your options? If your purpose for selling your structured settlement payment rights to structured settlement payments is simply to go shopping or take a vacation, its probably better to obtain a loan or put off the purchase of the item. A big potential mistake is trading an asset providing income with a fair rate of return for a discounted amount of cash that is then spent on another asset like a boat or sports car which is guaranteed to depreciate in value. If you are contemplating the sale of all or part of your structured settlement payments you should contact a settlement planning professional or a financial planner familiar with such transactions who can assess your needs. Plan ahead if you can so that you don't succumb to a desperation move. Consider the conflict of interest that may arise by simply relying on the factoring company representative for planning advice. It's astonishing that a number of them are advocating trading your structured settlement for an asset guaranteed to depreciate in value! They may also not be qualified to give this advice. Check their qualifications. Ask them to put in writing how long they've been doing this. What professional designations do they hold that lead you to believe that they know about structured settlements?

Don't treat the process of selling structured settlement annuity payment rights as if you are going to a "pawn shop". Sadly we receive calls from people who sold the security and future guarantees of their structured settlements, for a discounted amount of "cash now" years ago, now wondering if there's anything that they can do to get their payments and security back. Don't throw your shopping instincts out the door! Many people are victimized through laziness and ignorance.

Other "war stories":

(1) We've seen factoring companies try to get one individual to sell all of her structured settlement payment rights when all she needed was $1,000!

(2) One factoring company is known to consistently charge a discount rate in the high teens, and sellers continue to do business with them even though they are way off the mark and uncompetitive. The cost to the seller is huge.

(3) We've seen factoring companies entertain the purchase of payment rights from a structured settlement just issued!

(4) We have seen people who were hot to sell annuity payments that were set up in the early 1980s (when percentage yields were in the teens) who didn't understand that their annuity was returning better than the stock market with much less risk. Fortunately a few conversations with us gave them a better perspective on the favorable deal they already had with their current structured settlement.

(5) We have seen both sophisticated and unsophisticated annuitants who are seduced by perceived investment opportunities. Before doing anything, those annuitants should consider contacting us or someone who can perform a Monte Carlo analysis , to evaluate their current and future needs and how they would be affected by the sale of payments at a discount followed by investments in equity markets. You also must understand the transaction.It's critical to your long term financial security.

A factoring transaction involves several elements (and the costs of these elements add up!):

(1) The discount rate which is the rate that the factoring company applies to your future benefit payments to come up with what those payments are worth in today's dollars.

(2) The profit margin for the investor which can vary by company and transaction

(3) The commission to be paid to the factoring company or the referrer of the business to the factoring company. It is important to dig deep on this. It may be buried in the deal. If the person who referred you to the deal maker was a structured settlement broker or settlement planner ask them BEFORE they refer you if if they are taking a fee or making a commission. Get it in writing.THEN ask for a written disclosure of that fee directly from them and the factoring company. If they will not disclose, run don't walk. Why? If they are taking a fee you need to know because that fee is fully negotiable. Many structured settlement brokers and settlement planers who receive calls and answer consumer questions on such cases, like 4structures.com, LLC, DO NOT and WILL NOT take any fee or commission on structured settlement factoring cases. Moreover, we insist that the factoring company not take additional profit at the tort victim's expense because we do not take a fee. 4structures.com, LLC's John Darer has compiled The Structured Settlement Clean Vendor List at Structured Settlements 4Real which lists those structured settlement brokers and settlement planners who have attested, among other things, "under penalty of perjury" that they do not take compensation as the result of structured settlement factoring transactions.

(4) Legal and Court costs to achieve a "qualified order"

Always ask for the "effective discount rate". This is the rate that takes into account all of the above costs. It is the only way to really appreciate the cost of what you are contemplating doing and compare it.

While selling your structured settlement payment rights is permitted under Federal and state law (subject to certain rules), advocates for consumers and the disabled have publicly called attention to the practices of some firms (factoring companies) engaged in the purchase of structured settlement payment rights. There are some established factoring companies who do responsible advertising and those that do not. Then there are individuals who factor on a part-time basis, or make money posting bogus "opinions" and "stories" which seem to relate a real life experience but prove to be little more than dubious endorsements to draw you in to the main event, which is getting you to part with long term financial security through a factoring company.

While there has been some improvement by some companies, we believe that the practice (in various forms) by other factoring/transfer companies of sensationalist and predatory advertising, creates initial interest confusion for the consumer who may just want to learn about structured settlements on his or her own time, in order to make a potentially life impacting financial decision. A large number of factoring companies falsely imply that you can simply call them up and get "cash now","all of your cash now", "immediate cash now" and the like when the reality is that it could take months. One hopes that there is some ethical consideration given by the factoring company. Unfortunately that is not always the case and consumers can be victimized through unmet expectations, or worse. A number of articles in the Structured Settlements 4Real web log examine "Factoring Company Business Practices" in more detail. A list of so-called "Cash Now" pushers is also maintained on the site. We believe that advertising "cash now", "all of your money now" or any such sales pitch knowing full well that such promise cannot be delivered to consumers, as implied by the words "now" and "all of your money", is both unethical and a fraud on consumers.

Prior to the enactment of state structured settlement protection statutes and the Victims of Terrorism Relief Act of 2001, which created §5891 of the Internal Revenue Code, the aforementioned "cash now" deals which were sharply discounted. The sale of structured settlement payment rights today requires a Court in your state to review and, if appropriate, make a "qualified order" approving the sale of such payments or a hefty 40% excise tax is applied. The concept of Court approval is intended to protect the plaintiff/annuitant from entering into a deal that is not in their best interest. The statutes in the States of Florida, Massachusetts, Minnesota and New York require certain up-front disclosures when a structured settlement is created. This doesn't however, mean you need not pay attention. The lack of regulation of the factoring industry sector buying structured settlement payment rights means you should beware! Cuidado!

Plaintiff/annuitants should know that some of the issuers of structured settlement annuities will actually commute your annuity internally if presented with a "qualified order", so consider approaching the company issuing the structured settlement annuity as part of your process. While one tax attorney has opined that commutations might be a perilous way to go for the qualified assignee of the annuity issuer, you may find that the "effective discount rate" is less than the one embodied by a third party factoring company. At the very least you should be able to use this as negotiating leverage.

Finally, if you must go down the path of selling your structured settlement payment rights, write a note to yourself, setting forth your reasons for selling, so that in the future you can be reminded why your younger self took steps that affected your financial future

Please contact us if you have any questions. We're here to help you better understand your options.