By John J. McCulloch, JD/MBA, FLMI, CSSC
People sometimes get into tough financial situations and will need to access funds they would be better off leaving alone. From the relatively straightforward process of borrowing from your own 401(k) to the more nebulous payday loan shops, there is a steep financial price to pay when accessing funds this way.
One such financer of last resort are factoring companies, which run the gamut in buying up cash flows, from lottery winnings to pensions. A source of business for them is the buying of structured settlements. Many people have seen the ads on television with people screaming “it’s my money and I need it now” to opera singing Vikings on a bus. What the ads don’t tell you is the process itself is neither quick nor easy, has significant legal fees that you will pay for, with a number of pitfalls along the way that anyone contemplating such a sale should be mindful of.
Choosing such an option to obtain funds should always be a last resort for anyone and done only for the most extreme needs.
A structured settlement is an injury settlement where some part of the proceeds