Keeping Track of Selling Structured Settlement Payments

“I have no idea what structured settlement payments I have left.” 

“There’s no way I have already sold those payments.”

Those of us that have been in the cash flow business for any length of time have heard these comments all too many times.  A potential client will call interested in receiving a lump sum for their structured settlement payments for the second, third, or even a fourth time, but don’t have a clue what payments they still have or have already been sold.

I often wonder how someone receiving substantial monthly structured settlement payments can lose track of what, in many cases, is a substantial stream of income.

 Below are some of the reasons why we might hear these statements:

Overselling Structured Settlement Payments

There are occasions when clients do know they have sold all structured settlement payments but try and squeeze out a cash advance from an unsuspecting company that doesn’t complete its due diligence before giving the advance. 

In addition, a prospective client may know they have already sold the payments in question, however they try to ‘resell’ them not realizing this will be discovered during the process leading up to the transfer of payments, and often times after the structured settlement company incurs an expense in discovering this.  This doesn’t happen often but should be on every company’s radar.

Overbuying Structured Settlement Payments

I have heard stories about companies purchasing more structured settlement payments from the annuitant than they originally were told would be purchased. The structured settlement company added payments being purchased to the contract that were not disclosed to the client during the sales process… and the annuitant signed off on documents without reading and fully understanding what was in them.  There may be companies in the industry employing these tactics, but for the most part, the majority would not engage in such practices.

Selling Structured Settlement Payments with Diminished Mental Capabilities

On occasion, a company will end up working with recipients of structured settlement payments who have diminished mental abilities, resulting from the accident that ultimately led them to receive the settlement. 

Often, they seem capable of making decisions of this nature however do not have the mental capacity to make these kinds of financial decisions, thus losing track of their payments.  This is a small segment of the customer base and by no means the norm.

Irresponsibly Selling Structured Settlement Payments

Then there are the totally irresponsible recipients of structured settlement payments ….the clients that are addicted to selling payments and will sell and sell and spend and spend until there is nothing left.  These clients just don’t care that much because as far as they are concerned they have plenty more… to them it is found money.

These individuals were irresponsible before they were awarded a large sum of money and now are even more irresponsible with their newfound wealth.  They have no idea what payments are left and blame everyone but themselves when they realize the well has run dry.

Selling Structured Settlement Payments in Distress

Sometimes responsible recipients of structured settlement payments find themselves under so much financial duress that they don’t realize the number of payments they are selling because of the stress they are under.  They just focus in on the amount offered and feel relief that these funds will help them out of their current situation and do not necessarily concern themselves with what it takes to accomplish that goal.

Some people just shouldn’t sell structured settlement payments at all. 

In the end maybe, just maybe, its not such a bad decision after all when a judge denies the transfer of payments in some of these cases.  Although its true, for the most part, that annuitants have legitimate needs that only a sale of payments can help solve, this does not change the fact that there are annuitants who are reckless and irresponsible. 

Denying the transfer will not change their irresponsible ways. However instead of blowing their lump sum all at once, they are relegated to spending recklessly on a monthly basis only.