Pat Farber’s Structured Settlements Alert : August 25, 2010

A Wall Street Journal article recently shed light on a relatively new way factoring companies are earning income from structured settlement annuities.  In settlements involving personal injuries and some non-personal injuries, the injured party often agrees to an annuity that pays out settlement funds over time instead of in a single lump sum.  The annuity income is tax-free.  In addition, structured settlements enable injured parties to better plan their financial future.  However, when an unforeseen financial emergency arises and money is needed fast, injured parties can sell their annuities for cash to factoring companies at deeply discounted rates.

According to the Wall Street Journal, factoring companies are now selling the purchased annuity streams of income on the secondary market, often promoting these financial vehicles as “guaranteed” with high rates of returns.  In reality, the secondary market for these investments can be fraught with risk.

Click here to read the full article.

Patrick C. Farber Structured Settlements Broker with more than 30 years experience, Pat has placed over $1.75 billion in annuity premiums and U.S. Government notes. He specializes in settlements involving medical malpractice, physical injury, non-physical injury, product liability, workers’ compensation, mass torts, punitive damages, employment, construction defect cases and attorney fees in court hearings, arbitrations and settlement conferences–all at no cost to clients. E-mail Pat personally at pat@patrickfarber.com or call 800-734-3910.

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