Thousands of Americans collect long term payments from Structured Settlements, Personal Injury, Annuities, Lottery Winnings, and Seller Held Mortgages. Many more are finding that these incremental payments have seemingly shrunk in today’s inflated economy.
Jeremy Boydd bought his home in 2002 after winning a small fortune in a state lottery. He was not disabled from an accident, he just got lucky. He used a large lump sum to purchase the home, and decided that his monthly payments would be directly paid to his mortgage note. Smart thinking some would say. Jeremy also took advantage of the immediate capital from his initial large payment and started a small business.
The money he invested in this entrepreneurship was not entirely a bad choice. However, without the experience of owning and operating his own business, he quickly learned that the financial management of a hopefully growing enterprise as his required extensive planning and foresight that he did no possess.
The first two years were a success. Jeremy soon found himself in a position to purchase a larger lot, with a self standing structure already in place. Not quite quite new, but gently worn in. Small and minor repairs would have the office ready to take on staff and house a larger inventory.
Again, not entirely a bad business decision. However, not realizing what and how much his total inventory and investment were worth, Jeremy did not have adequate insurance to cover damages from a renegade fire from the thick and dry foliage growing behind the building. Experience might have led him to create a larger easement, preventing the spread of the flames. Or, it may have been spread by the gust and winds that day in either case.
After fire fighters extinguished the flames, anything not destroyed by fire, was certainly rendered obsolete by the saturation of water and chemical flame retardant used to expel the angry heat. Facing a half a million dollar deductible he could not afford, Jeremy was unable to recover his losses, and although his payments saw to it that his mortgage was paid. His investment, business, and job were gone. It all went up in smoke as they say.
Some people argue that Jeremy had a beautiful home and his mortgage was paid, it would not be difficult to recover from the incident. Well, they could not have been further from reality in their thinking. What neighbors and friends, as well as family forgot, was the lifestyle and additional expenses this business brought with it.
Revenue from the small and growing business afforded Jeremy two new cars complete with insurance and car payments. He had financed office equipment for the home, and several additional improvements such as pool, and additional floor to the existing home. Increased size of his living space also increased his monthly housing expenses.
With all these needs and financing met by a salary derived from his now deceased business, Jeremy found it increasingly hard to keep on top of bills, and payments. Stress from financial worries and burdens inevitably gave way to the demise of his marriage of nearly 14 years. Private school tuition for their young son was also not an item of luxury they would continue to be able to afford.
Jeremy sought help from the banks, urging and pleading them to give him more time, to allow him extensions, based on the new job he had taken as an inventory control supervisor, but the banks would not budge. Jeremy’s wages were not sufficient to cover and maintain this affluent lifestyle any longer. Having gone from blue collar worker to small business owner, Jeremy never envisioned that having a degree would cast him out from so many possible job opportunities.
Their mid-size town had grown in just a few short years to a bustling little city with hopeful and well qualified college graduates applying in record numbers for new jobs. His wife Linda, worked odd jobs baby sitting, cleaning homes, and even walking other neighbors pets. Nothing seemed to get better, and the severity of their worsening financial snow ball got larger with every day, week, and month that went by.
Jeremy also turned to his lottery winnings. Thinking if he gave the proper documents, and showed sufficient need to the insurance company responsible for paying out his winnings, he would be able to access his future monies to help alleviate and restore not only his diminishing credit score, but virtually his entire life.
There was no hope from the insurance company. The structured payments, once decided and set into motion, was not a negotiable contract. In fact, the insurance companies provided no sympathy at all other than an obligatory, we are terribly sorry Mr. Boydd, there is nothing we can do.
Desperate, broke, divorced, and facing foreclosure, Jeremy found himself at a crossroads, he would have to file for bankruptcy in order to save the one thing he had left remaining. He wanted to save his home. Jeremy began searching the Internet for lawyers and ads claiming they could help prevent repossession of his home by the banks.
One of the ads indicated, if you were a current recipient of structured settlement, personal injury, annuity, or lottery payments, he could get cash now to pay off debts, buy a home, a car, take a vacation, and more. The company claimed that they could provide a one time large lump sum of money almost immediately for payments sold to them. Skeptical, Jeremy started to search the Internet for companies that would buy payments, Noticing there were several kinds of future payments that could be sold for cash now,
Jeremy came across companies that would buy not only lottery payments, but they could purchase future annuity payments, structured settlement and personal injury payments. Deciding he had nothing to lose, Jeremy began calling the toll free numbers to inquire how they could help. After contacting several companies, Jeremy felt that he had somehow made some progress. He found out that he could get a very accurate estimate or quote on how much his future payments were worth if he sold them.
There were some very basic pieces of information that Jeremy provided the companies with. They needed to know how much his payments were, how often he received them, and how many were left. One of the companies he contacted offered some excellent advice. He had given an explanation of the events that led up to now, and seeing his dilemma, a representative asked him if he would be interested in possibly attending school and earning a specified degree in addition to obtaining the money necessary to bring his mortgage current.
Overjoyed at the possibility of investing in his future via a college education. Jeremy calculated approximately how much he would need to attend the local community college’s two year degree program. He could sell a portion of his payments, and maintain his mortgage with the remainder. The large lump sum he would receive after selling future payments would prevent him from foreclosure and pay for tuition.
Jeremy Boydd’s decision to sell lottery payments he was receiving was based on his unique and individual goals, and immediate needs. Thousands of people have sold long term future payments for cash now. There are countless stories of families struggling with an unforeseen expense, inflation, un-employment, and debt. Many of these people chose to sell payments in order to get the cash they need now to overcome immediate financial burdens that threaten to destroy everything they had worked for and built.
Over and over, more frequently people have decided that getting their money now to pay for things like credit card debt, bills, tuition, home purchases, weddings, vacations and more could not only immediately aid and help them, it could potentially benefit their long term financial goals and otherwise make certain dreams possible that were once out of reach.
Long terms payments were not the invention of individuals receiving them. Insurance companies long ago in the 1980’s along with a numerous amount of political entities and psychologists argued that too many Americans were not capable of handling and budgeting their large lump sums. Debate over whether or not receiving access to huge sums of money contributed to such diseases as alcoholism, drug addiction, and habits such as gambling that would lead to addiction and poverty ran rampant.
Legislation by congress in the early eighties declared that a majority of settlements and winnings would be awarded in specified increments over a pre-determined period of time. Thankfully, congress was also wise enough to realize that there could and would be times when it would be beneficial and necessary for an individual to gain access to their money. Congress provided laws that protected an individual’s right to sell future payments for cash.
It was this very same legislation that gave birth to the inception of structured settlement and factoring companies such as Woodbridge Investments, a pioneer in the purchasing industry since 1992, JG Wentworth, Novation Capital, Peachtree Funding, and a handful of other notable names.
These companies specialize in buying future payments from lotteries, annuities, and structured settlements. Over time, a more stream lined process has made it even easier for individuals who have decide to sell payments for cash now to get their money. Many of these companies will also buy other types of periodic income and securities such as seller held mortgages.
When you sell your future payments to a factoring or structured settlement company, you will receive a discounted amount of the total amount you would ordinarily receive by waiting. Future payments from a settlement, or annuity for example, include a certain amount of interest that you earn in exchange for allowing an insurance company to pay you over time. This interest is factored out when you chose to get cash now fro payments.
Factoring is a somewhat confusing and complicated mathematical equation for many ordinary individuals to understand. It involves calculated interest, TVM (Time Value of Money), and inflation playing a part of the transaction. A dollar today will have more buying power than a dollar five years from now.
What would Jeremy Boydd have done,had he not been able to get the cash that he needed now to save his home. So many Americans have seen the benefits of getting a large lump sum now that it does seem long term payments are becoming a short term solution.
This is a perfect example of how planning when and how you are going to receive your payments is crucial. It is much easier to decide what will be anticipated than to determine what may never happen. No one could have guessed that day, such a thing would or could have happened.
