Sometimes in life we delay looking for solutions to our financial problems rather than dealing with them head on. This tactic rarely works because financial problems tend to become worse as the interest fees and penalties continue to grow. Perhaps the fear, depression or mistruths keeps us from realizing all the options available.
When you’re suffering financially waiting for payouts from a structured settlement annuity isn’t the most convenient way to get money. Clearly it would help if you can have access to your money sooner perhaps in a lump sum payment. Maybe you thought about looking into it before but delayed calling because you have poor credit and were afraid you wouldn’t be approved. The good news is that selling your future payments allows you to get the cash you need without borrowing money. It is not a loan it is a transfer of the legal rights to your future payments. So there is no money to pay back or credit approval.
The only way to improve your credit is to pay off your debt and selling your structured settlement could be the key to financial stability. Use the cash lump sum to pay off your credit cards or avoid foreclosure and invest the remaining funds to start earning interest for you. It is time to take control of your finances and reap the benefits of your money.
Working with Rescue Capital to sell your structured settlement for a lump sum has some benefits too. We can custom tailor the package to suit to your needs and goals. They can help you develop a plan to pay off your debts and work with your creditors to pay off the debts immediately. We’re also here to answer your questions without delay. Remember, the money is legally your property so why not use it to suit your needs.
You don’t have to sell you entire settlement. You can sell only part of your settlement, keeping some of your scheduled payments and have an influx of cash for your immediate needs. Cashing out your structured settlements can give you more financial freedom which is something everyone can use.
Don’t delay getting the facts about your financial situation. Call Rescue Capital today to discuss your situation and make your structured settlement to work for you. Call 866.688.3532 for your free no-obligation quote.
Last week J.G. Wentworth released a press release stating that only 6.6% of structured settlement recipients sell their future payments and that those who do sell commonly cite getting out of debt, purchasing a home or vehicle, unexpected medical bills or continuing their education as reasons for selling. [i]
The press release stated that the study was based upon data collected by J.G. Wentworth over the past 20 years but it did not provide any further details regarding the data collection. For instance, how did they obtain the data; how many people were included in the study and did it include data from other factoring companies besides J.G. Wentworth/PeachTree? In addition, there was no mention as to whether discount rate played a considerable role in the annuitants’ decision to sell.
Back in 2008, J.G. Wentworth published an email survey of 115 respondents who previously sold some or all of the payments to J.G. Wentworth in exchange for a lump sum payment. In this survey, only 18% said they were completely satisfied with their structured settlement. 31% said they didn’t wish that there attorney negotiated a single lump sum payment which means that many of them would have liked a lump sum payment. 60% of the respondents sold their payments to pay bills while less than 5% did so in order to buy a house. 30% stated that they would not sell their payments again. J.G. Wentworth only released 9 questions to an industry blogger and did not reveal the remaining questions, the number of individuals the survey was sent to or any other circumstances that could have skewed the results of the survey.[ii]
In the 2006 The National Structured Settlement Trade Association (NSSTA) survey of attorneys involved in structured settlements (43 telephone surveys) and structured settlement recipients (1275 telephone and Internet surveys) 75% of annuitants were happy with their structured settlement and would recommend one. [iii]
In an AIG survey of 1,000 participants, 65% of respondents said they would elect a lump sum payment, while 26% stated that a lump sum was more appropriate to pay bills.[iv]
So if that many people wanted a lump sum payment then why aren’t they selling? In a review of 100 recent factoring transactions it was revealed that the average discount rate was 13.75% with 7.5% being the lowest and 20% being the highest. So you have to question whether the 93.4% of individuals that chose not to sell would have changed their mind IF the discount rate was closer to the 7.5% rate.
As structured settlement annuity premiums continue to decline (10% from 2010 and 20% from 2008)[v], there will be fewer annuitants available to market. While it seems perfectly logical that this would in fact lower the discount rate, if one looks at current trends it mostly will not occur.
For example, the top three companies spend millions of dollars a year in order to entice annuitants to sell. They’re all well established and are household names. Smaller, lesser known companies cannot afford to go head to head in advertising spends with these industry giants so they tend to focus on non-traditional marketings. While some sellers will seek out these smaller players in order to obtain better rates more often than not a first time seller will call one or two companies they see on TV. Which basically means they are going to receive rates of 13% or higher.
While the decline in annuities does not currently seem to be an issue for J.G. Worthworth/Peachtree who already completed a $244 Million Securitization this year[vi], one has to wonder whether primary market decline and increased competition combined with well informed, tech savvy consumers could adversely affect their business in years to come.
J.G. Wentworth had securitizations worth $469,000,000 in 2011 and $579,000,000 in 2010.[vii] This represents 9.4% and 10% of the annual premiums for those years.
Fees for selling your annuity are not common. In fact, when we heard the rumors we had to see it with our own eyes. Much to our surprise as well as the potential seller, the rumors were true. That’s why it is always important, regardless of your situation, to read the fine print and this case really drives the point home.
One day not that long ago, an annuitant gave us a call looking to sell their structured settlement annuity payments. The annuitant, we’ll call her Chelsea (not her real name), needed a lump sum to save their home from foreclosure. Chelsea like many Americans was struggling financially and was really having a hard time. Unlike others in her situation she had an asset she could use to get back on her feet. So she started to call around to a few places to see how this “cash now thing worked”.
During her search she called several companies to get quotes. One of the companies told her she could get the cash right now and an immediate advance. She was so relieved that she could get the cash she needed to keep her home. She thought she was seeing the light at the end of the tunnel only to discover that light was a train about to run her over.
What Chelsea soon discovered was that this “cash now thing” was quite expensive. In addition, to the rate they were charging her for buying her payments there was a potential to be charged an extra $6,000 in fees in order to process the transfer of her payment rights to the buyer as well as other fees if she decided to terminate the contract. Unlike some companies this company’s rates were not very competitive either. So in order to get her cash now Chelsea would have to pay top dollar.
Luckily for Chelsea she had talked to an advisor that she trusted. He told her that these fees were not common and told her to give us a call for a quote. She explained to us what had happened and we provided her with a no-obligation quote. Chelsea was pleasantly surprised with our rates and signed with us immediately. She has since gone through the court process and received her money.
If you’re struggling and considering selling your future annuity payments for a cash lump sum, consider all your options, do your homework and get multiple quotes. Don’t forget to read the fine print and speak to a trusted advisor to ensure you’re getting an offer that is in your best interest.
To learn more about Rescue Capital and how we can help you get the most cash for your future payments, call 866.688.3532.
At Rescue Capital, we have always stressed the importance of having an emergency fund. If you have an emergency or you suffer job loss, having a well funded emergency fund is an incredible asset. It allows you to pay for things such as car repairs or your mortgage without having to turn to credit cards.
Unfortunately, only 54% of Americans have more emergency savings than credit card debt according to a recent Bankrate.com poll. 25% of Americans have more credit card debt than savings, while 16% have no credit card debt or savings.
Approximately two-thirds of taxpayers are expecting a tax refund this year. 44% of them plan on stashing some of their refund in savings while 40% plan to use some of it to pay off debt, according to a survey by the National Retail Federation. Some individuals will use the money for every day purchases, vacations or big ticket items.
If you have no emergency savings or you have more debt than savings, you should fund your emergency fund with your tax refund if all possible. While paying off debt should be an important goal, not having an emergency fund in place can cause you to become deeper in debt.
What if you don’t have an emergency fund, you are in debt and you don’t have an income tax refund. Or worse you owe money to the government, what should you do?
First and foremost take a look at your spending. Where is your money going? Look for ways to reduce those little expenses that are eating away at your budget such as visiting the vending machine or shopping when you’re depressed. Search for ways of saving money such as raising deductibles, refinancing or getting insurance quotes. Create a budget and stick to it. Don’t forget to include saving into your budget.
If you have scaled back where you can and you still can’t pay off your debt or create an emergency fund, downsizing may be in order. Try selling unwanted items or other assets such as recreational vehicles or future periodic payments from an annuity. Typically the rates to sell illiquid assets such as structured settlement annuity, divorce settlement, a single premium immediate annuity, life insurance policy, inheritance, royalties, or a pension are considerably lower than credit card interest rates.
If you are interested in receiving a free market analysis of your illiquid asset as well as no-obligation written quote, call Rescue Capital today at 866.688.3532.