After a personal injury claim the plaintiff heads to court. Depending on how much of a pit bull their lawyer is and the severity of the case often times depends on the amount of money the plaintiff is awarded. What is very common over the last twenty years is a settling of a case where the payments come out as being structured for the plaintiff but not for the lawyer. The law firm will almost always collect their fees up front but the insurance companies like that they can change their payment structure to making payments all at once to giving the defendant a stream of income that is seen as reliable and safe.way when the right holder to the payments decides that they may want to sell their payments to one of the well known
These payments often are paid out over the life of the annuitant or in some cases are known as “guaranteed” pay outs. Either secondary market transfer companies that works with the seller to get them into the court room to plead their case in front of a judge on why they want to sell their payments. In some states what is known as a IPA can give independent financial advice on the benefits and drawbacks of them selling and that makes it so the judge will not have as big of any qualms on them transferring their payment rights.
Dangers that are involved in the sale process is not just that those facilitating the transfer may not understand that the owner of the payments can do as they please with their money but also that they do not know how a judge will react. For example recent cases from court records show a woman who wanted to trade in her payments that were not due until 2025, 2030, and 2035 that totaled $201,000 which is no small chunk of change. The issue is that in todays dollars the money after all fees were accounted for came out to only $50,000 give or take. The judge looked at it and said that you are selling at a loss of $150,000 but in reality that was completely false and incorrect.
Cases like this make it a big problem when selling payments. Another red flag that has happened is a lot of sellers try to be tricky and sell their payments to different companies but if they get caught doing so the consequences can be very devastating to the fraudster. Being honest with what you want and need is always the best policy but trying to explain the issues to a judge can be difficult.