Austin, TXAfter twenty some years in the structured settlement business, Terry Taylor knows his industry—the good, the bad and the ugly. A former president of the National Structured Settlement Trade Association, Taylor warns there are vultures that prey on people who are poor, uninformed or desperate. The vultures Taylor is talking about are not part of this organization, but people often do not understand the difference. "Yes, I am a little mad at the predators," says Taylor. "I have always worked with plaintiffs to protect their money, and when I see them getting ripped off, I don't like it."
Taylor works with Strategic Capital, a highly reputable company that both buys and sells settlements and recommended by Consumer Attorneys of California (CAOC).
The bad apples are referred to as the "Factoring" companies—their sole purpose is to buy up settlements at excruciatingly high discounts. Unfortunately many people get hurt and don't realize that a 30 percent charge for the sale of an annuity is not the industry standard.
Americans receive as much as $4 billion a year in monthly disbursements usually as the result of a lawsuit. Taylor was once "adamant" that people never sell their structured settlements for cash, but these are tough times in the US and he has changed his position. "I have come to the conclusion it is sometimes better for people to save their home from foreclosure, for example, rather than continue to receive a monthly payment," he says.
"If they just want the money to buy a fast boat," says Taylor, "then that's still not a good idea."
"If you are going to sell your settlement for cash beware of the "discount rate" you're being offered." Taylor's company, Strategic Capital, offers a discount rate on average of 12%. If the structured payment has a future value of $100,000 in a year—you get $88,000. "Yes, we make money, but it's better than a credit card rate, and it is fair."
However, there are some rough players in the business that will take you for a 30 percent "discount rate"—and you'll end up with $70,000.
"People don't understand discount rates," says Taylor. "All they know is in a few years I get $50,000, but if I sell it I am going to get $22,000 today. That's a horrible deal, but they are just looking for cash now."
In 2002, as the then-president elect of the Structured Settlement Trade Industry, Taylor and others lobbied Congress for changes that would protect settlement holders from predatory practices. "Before then, we saw some horrendous deals," he says.
Since then, the law requires that the sale of every structured settlement must be approved by a judge, but Taylor still sees problems. "Most judges take care to guard the interests of people who are selling their structured settlement, but sometimes they don't," he says. "Sometimes the judge, who doesn't add very well, will approve a 30 percent discount. It doesn't happen very often, but it does happen."
And, before you sign, ask if the company that wants to buy your structured settlement has ever gone bankrupt. It's a good clue to stay away says Taylor. And it is very import to ask who is servicing the debt. Ideally, it should be the insurance company and not the people who are buying the settlement. If they go broke—so will you.
People are dealing with some very difficult circumstances in the US at moment. If you sell a portion of your
structured settlement to a company, they may harass you sell the remainder. If you discover you got a raw deal on the first sale, and decide to sell the rest to another company, the first company may refuse to work with another factoring company, making them the only one who can purchase any future sale at whatever price they set.
"Strategic Capital has always been fair with people," says Taylor.
"Yes, I sleep better now since 2002," says Taylor. "I feel much better than I did because so many people back then were being taken of advantage of."
But, warns Taylor, there are still some seriously bad apples out there and it is still a buyer beware situation.
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Posted by Austen
Need some advice on my settlement i want to know if im getting a realistic deal... My court date is in 2 weeks
Posted by Michelle
I lost a great deal of money and was taken advantage of 20 yrs ago when due to some very hard times had to sell a portion of my annuity payments. I lost a very large amount of money! I was sent to one of their attorneys to do the pprwk/sign the documents. My husband was out of work and we were about to loose everything we had, not to mention we had 2 small children. I think that I got 15k and they got like 100k. I wish I would have just walked away it makes me sick to know how much they took from me at the time.
Posted by Jessica
Jg wentworth and Peachtree are owned by the same company.
Posted by Kenny
How c as needed I get some of my money back from JG Wentworth I feel they took advantage of me and took my money
Posted by Isaac Antonio Busby
I need a lawyer because I have a story to tell about how structure settlement companies did me.
Posted by Michelle Frankston
I was working with a few different companies throughout my sale. I sold one of my payments to J.G. Wentworth and through Peachtree Settlement funding. Everyone, please do your research. it turned out I was ripped off very bad and the interest rate I was charged was higher than credit cards! I also worked at one point with novation capital and was also ripped off to a degree. I sold approx 1,400,000 in exchange for $200,000. I strongly advise anyone to shop around because there is alot of money being pumped into advertisement because these huge companies make so much money on these. please be aware and check out the BBB and rip off report of every company you call!
Posted by Evan
please contact me regarding structured settlement
Posted by Curtis taylor
Is there a gd number I can call
Posted by Brenda o.
My husband and I have a structured settlement that where wanting to sale possibly 5-10 years just to do some home improvements.we've talked to a top named campany who just thought we were stupid. So who would those of you who had good experiences in your sale. Thanks in advance Brenda
Posted by Michelle W.
I was conned into selling mine by a well known company, they took advantage of my need for some of my funds due to my son having cancer, I was then scared into two things..1. Just selling it all because "we never know lifes " ready or nots" and that my son needed me to do what's best and selling all future payments would be in my best interest. Then I was told that If I didn't act a certain way or say what I was told to say..the judge might not believe me and say no, leaving my son without cancer treatments. Now by selling all my remaining payments and only getting $7400 for it, my son is in remission (thank goodness) but, I face going homeless with my children, and my car was stolen, and we are starving, while the company is eating out orob every night, living financially secure. I was young and scared when my husband died, I had a lot of men in suits and ties coming at me for my business in placing our settlement with them. But not even my attorney tried talking sense into me or educating me, not once was I told that I could never go back and use my money once I put it with a company, I found that out later. But, again, they all are cozy waiting on the next mentally unstable victim to come along. :-( I wish I could rise up and Sue for what they took from my children, but, with their big hot shot attorneys, they prob would make me look like a fool again. Yes folks do your ressearch, think things through and don't let this componies bully you into anything you don't want to do. Follow your gut instinct.
My sons payments are safe, his can not be touched, thank goodness, but I intended my payments to help me in raising two children alone, nothing turned out the way I'd hoped it would.I do feel like a stupid failure,I should had known better.
Posted by Jeremy Warwick
I have a structured settlement that spans over my 60's with monthly payments starting at age 40 until the end at 65. Is it possible to go after two years of those 25 years at this point for clearing some debt and getting back to college.? I'm 28.
Posted by Joyce Dollarhide
I have a structured settlement for 10 years
I live in Texas anyone the familiar how this works in my state I'm thinking about selling the whole structured settlement for 1 cash payout
Posted by Lisette
I would like to give Kyle foster a call can I get his number or email how can I contact him
Posted by Rageni
The lawyers that settled my case claimed I should sell my annuity and then arranged a sell out, found a buyer, negotiated a deal, and wants me to sell at 49 percent of my 15 year annuity does you seem right?
Posted by cynthia rios
Can you please contact me
Posted by Sheryl
When I was looking to sell my settlement, I must have talked to near a dozen. I found the larger ones (like mentioned by Adrianna) were offering the worst quotes of the bunch. In the end I narrowed it down to Strategic Capital and My Structured Settlement Cash as the best options.
Posted by Adrianna
Good read! I would also add that I had a deal with JG and Peachtree bidding back and forth and neither of them would go over 35,000 for my payments and after some research I ran into Kyle Forster who brokered my settlement payments to private investors and got me 50k! He is worth the try give him a call if you want the best quote.
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