Plaintiff attorneys may be approached by past clients with questions about whether it’s a good idea to sell their annuity for “cash now” or how they go about selling either a portion or all of their structured settlement annuity.
Occasionally, clients find themselves in a situation where they need access to cash for certain reasons. Their annuity may be the only source they have to access some immediate capital. The Internal Revenue Code Section 5891 allows clients to sell their annuity to factoring companies in exchange for a lump sum of cash.
The problem is that if they get on the phone and call a random “cash now” company (called factoring companies) they see advertising late at night, they’re most likely going to get a bad deal.
A court order is part of the process when selling an annuity and provides some level of protection to clients against factoring companies who want to take advantage of their situation. Unfortunately, due to the number of requests that the courts handle, it’s common for the applications to be rubber-stamped by the judges, which leaves the clients vulnerable to predatory practices of factoring companies.
Here at Amicus Settlement Planners, we always tell plaintiff attorneys who get this question from a past client to refer them to us. We do not buy structured settlement annuity payments. We have, however, been in the industry long enough to know which companies will treat them fairly and will likely offer them the best offer.
We always recommend that anyone considering selling future annuity payments get quotes from several companies. Clients can then use quotes from other companies to negotiate and get a better deal. A little bit of competition amongst factoring companies will result in a much better deal for clients if done correctly.
When clients call your office and say, “I need to sell my payment. Who do I call?” The best course of action is to refer them to us. We’re happy to help them find a company that’s not going to take advantage of them so they can get the best possible deal if they need to sell their payment. And before we even consider selling their settlement, we’ll talk to them about what other options they may have available to them other than selling their annuity.
Give us a call if your client is in this situation. We absolutely can’t stand factoring companies that prey on these injured clients that have annuities, and we’ll do everything we can to make sure your client makes a wise financial decision.
Note: For a proactive approach to protect your clients from predatory “cash now” companies, make sure to check out this blog article.