"Settlement Funding" ..... a beneficial service or blood sucking?

[Stinky The Clown]

These companies take full ownership of your legal settlements that are paid out over time. They give you a discounted payment for the total amount and then the settlement gets paid to them.

For example, if you get a ...... I dunno ..... Worker's Comp settlement, let's say. Its worth a total of $500,000 over your lifetime. They pay you some reduced amount ....... let's say $250,000. You, in turn, sign over your interest in the settlement to them. They make the difference between what they pay you and what they collect as pure profit.

You get paid off now.

They make money.

Back to my thread title:

"Settlement Funding" ..... a beneficial service or blood sucking?

[madinmaryland]

1. Why would you want to add a middleman between you and the money you are duly

owed.

Unless you need the money right fucking now, then you are wasting your money.

[hughee99]

3. A friend of mine went through a middle man,

lost a good bit of money as a result, but was able to use the payment to start a business that he's done quite well with. It worked out well for him. That's not to say they can't also be bloodsuckers, but it's not all bad.

[MineralMan]

2. It all depends. In some cases, these settlement deals are

all that keeps a person from abject poverty, especially in extreme circumstances.

[Geoff R. Casavant]

4. Could be either/or, depending on the circumstances

Structured settlements can take a long time to pay out, and a lot can happen during that time -- interest rates rise and fall, the company handling the stream of payments could go bankrupt, etc. The settlement funder essentially assumes that risk in exchange for a discount on the present value of the income stream. It would only take a little math to determine whether it is a good deal or not.

[SmileyRose]

5. BOTH

Desperate people get access to a service they feel is valuable enough to get their blood sucked for.