by Structured Settlement Watchdog®
While there are companies that buy structured settlement payment rights from small structured settlements, such transactions make little sense due to the costs involved. Because there are certain set costs associated with a structured settlement factoring transaction such as fees paid to lawyers for the court hearings mandated by state structured settlement protection acts, certain administration fees charged to the buyer by the annuity issuer, plus a profit margin for the buyer and /or buyer's investors to account for, the seller would likely have to sell more than they need to raise cash.
For example, I received a call in the last few months from a woman who was soliciting bids to raise $2,000 to pay for a funeral of one of her parents. The amount she'd have to sell was in well in excess of what she needed due to the attendant transaction costs. It did not seem to make sense. I suggested that the annuitant hold off selling her structured settlement payments, wait for the payments which were due to arrive a short time after and work with the funeral home to come up with better payment arrangements.
Note: "Buyer" in this context refers to a buyer of structured settlement payment rights from annuitant who owns them.
Last updated August 29, 2021