Factoring Companies follow a procedure laid out in IRS regulations IRC 5891. This statute is echoed in state regulation adopted by nearly all states to create a relatively uniform transfer procedure that insures that new assignees- you- are not subject to any issues or worse, IRS taxes.

It’s extremely important to note, however, that this legal process is designed to prevent the factoring companies and the original annuity payee from being subject to taxes.  It does nothing to protect you as the buyer or ensure your payments.  That’s where we come in, as a buyer focused firm supporting agents and individuals with legal representation, the worlds largest inventory, and the best purchase process in the industry, all designed to keep your investment safe.

Court Process:

A quick summary of a properly handled factored structured settlement transaction is that it must go through a court with the legal authority to hear the case, and change the terms of the original settlement to transfer the payments to a new buyer.  This procedure, guided by IRS regulations and state laws, ensures that both the seller, factoring company, and the buyer are not subject to penalty taxes as a result of an improperly handled transaction.

Factoring companies originate these transactions with targeted mail and mass media- you may have heard JG Wentworth’s jingles on TV over the years.  Wentworth dominates the market place and regularly issues large syndicated bond offerings backed by pools of settlements.  And even though Wentworth corporate has had its financial difficulties, the bonds backed by the underlying settlement receivables continued to perform with negligible risks or defaults.

Additional Process:

In addition to the court process, each state has disclosures, and in most cases, there will be many states where disclosure notices are required to be filled out by the seller.  Take the example of someone who won a case in Chicago, got married and moved to New Jersey, then got divorced and now lives in Florida and seeks to sell payments.

A properly structured transaction will have disclosures in each of those three states, will verify that there are no child support claims in any of those states, but must have the transfer proceedings heard in the original court of jurisdiction is in Illinois.

Perils Of Dealing Direct:

Are you prepared to verify that all these documents are done right and in place when you buy a deal direct from a factoring company?  It’s not worth the risk, and that’s exactly what we do for you with our properly structured purchase transactions.

You wouldn’t buy a house without title insurance.  Buying an SMA without proper guidance and independent legal review is as foolish as buying a house without a title policy.

Legal Summary:

Structured settlements are extremely safe investments, to the original annuitants, to factoring companies, to bond holders, and to you as an individual buyer, when they are done right.  As an advisor or as an individual investor, you are in the right place to learn how to do it right, and to find the world’s largest inventory of available structured settlements.

Be sure to sign up  on this website to see the world’s largest inventory and to get on your way to a safe, guaranteed income stream.