Structured Settlement Payment Purchasing Fact Sheet
What is a structured settlement?
- A structured settlement is a financial arrangement, typically used to resolve a personal injury or malpractice dispute, through a series of payments provided by an insurance company to a claimant, over a fixed period of time.
What is a structured settlement payment purchasing transaction?
- An option for individuals looking to sell all or part of their future structured settlement payments in exchange for a tax-free, lump sum payment.
Why would someone conduct a structured settlement payment purchasing transaction?
- Rather than waiting to receive a settlement over an extended period of time, this option allows individuals to receive a tax-free, lump-sum payment to cover current financial needs. Selling a structured settlement payment stream can provide financial flexibility necessary to respond to life changes.
Which cases or claims are eligible for the transaction?
- As all cases are different, claimants looking to sell their structured settlement payments must first contact a structured settlement payment purchaser to determine eligibility. A potential purchaser will lead the customer through a series of questions to determine eligibility. All structured settlement payment sales must be approved by a court of law, ensuring that the sale is in the best interest of the customer. Often times, the lump-sums provided are applied to important needs such as debt reduction, living expenses, work-related transportation and education.
What factors are taken into consideration when offering a quote for the purchase of structured settlement payments?
- As industry leaders, The J.G. Wentworth Company® subsidiaries take several items into account when determining the lump sum payment offered for a particular structured settlement payment stream. These include the size and timing of payments, internal cost of funds, servicing expenses, the expenses associated with obtaining court orders under various state statutes and expenses associated with ensuring that the companies obligated to make the payments comply with the court orders. It’s also important to note that not all structured settlement purchasing companies look at the same factors when making this determination.
What is the process of conducting the transaction?
- After an initial consultation with a representative from The J.G. Wentworth Company® subsidiary, each customer is assisted in determining the present value of their future structured settlement payments, the financial needs to be addressed, and what portion of their structured settlement payment stream they would like to sell for a lump sum payment. Initial paperwork is then completed, including all records and documentation required by the courts for the transaction to be approved. A petition is then made to the appropriate court for a hearing on the sale of the structured settlement payments. Support is provided to each customer to organize documentation and to review the procedures in each jurisdiction, in order to prepare for the court hearing. Once the transaction has been approved and final review of the file is completed, funds are distributed to the customer. Follow up is conducted to ensure customer satisfaction with the process and to address any questions or concerns regarding any existing or future transaction.
Are there any other considerations for customers?
- Each state’s Structured Settlement Protection Act requires court approval of the transaction. Many states also require that individuals receive independent professional advice from a lawyer or financial advisor. These items are there to protect individuals from improper transactions with third party buyers. Structured settlement payment purchasers also maintain a close watch on all state laws and regulations regarding structured settlement payment purchases, and keep customers advised accordingly. The structured settlement payment purchaser typically assumes all fees associated with legal fees and court costs.
Where can I learn more?
*These responses are based on the process and model of The J.G. Wentworth Company® subsidiary companies and may not reflect the transactions of other structured settlement payment purchasing companies.