Structured Settlement Funding

Structured Settlement Funding

The secondary structured settlement industry

The secondary industry was set up to help those that are currently receiving future payments from a settlement and have a need for more cash then they are receiving.

The intent of a structure is to help provide payments to an injured party over time to meet their ongoing financial needs. While the vast majority of settlement agreements stay in tact for the full term of the original agreement sometimes people have unforeseen circumstances that change their situation and needs. In this case the original agreement is unfortunately inflexible. Regardless of changes in ones circumstances you are not able to alter the terms of your original agreement to accelerate payments or get a lump sum.

For this reason there was a need in the market by settlement recipients that were receiving future payment streams that wanted and needed to get a larger sum of cash out of their annuity. Secondary market companies will in effect buy your future payments for a lump sum payout. For this reason they are often referred to as “settlement buyer” but in fact they are called factoring companies. Factoring is the

The purpose of secondary market companies is to provide the cash that is needed by settlement recipients that have had life changing circumstances that require an immediate need for money. The type of life circumstances can vary but usually include things like divorce, marriage, buying a house, having kids, etc.

The settlement recipient transfers the rights to their future payments to the buyer in exchange for a lump sum payout.

To summarize the primary industry helps individuals to set up and receive a settlement while the secondary market helps those individuals that already have a settlement but have a unforeseen change in their circumstances that require a lump some cash out of their settlement.