Cash Payment for Structured Settlements: When Even Worse Things Happen To Good People

So you’re injured on the job or perhaps you are wounded through the negligence of some company (hot coffee anyone?) and the case goes to trial where the judge and jury award you, the unfortunate plaintiff, with a large sum of money: say, 1.2 million dollars. Sounds great, right? Not so fast. The award comes as a structured settlement, which means that you will receive the money as equal payments of $40,000 per year for the next 30 years. Or you would, unless you call a structured settlement company and decide to receive a cash payment for your structured settlement. This would allow you to get a lump sum of cash all at once and let the company deal with the payments over time instead. But due to the terms of the contract you signed, the lump sum payment is for 350,000 dollars so your big payday of over a million bucks has been magically transformed by the power of legalese into less than half a million. Still not bad, especially if you have some urgent hospital bills to take care of and you need to make your mortgage payments while you’re out of work, right?
So you’re contacted by a few companies who heard about your terrible circumstance on the news and of your subsequent settlement and would like to help you in your time of need. Why wait to get the money that’s coming to you, they say, you need your cash now. Just sign over the payments to our company and we’ll get you a whole lot of money in a couple of weeks, just fill out the forms we send you and give us your account information so we can get you your money. So you get the forms and it seems okay so you give them all the information they request and you even have your lawyer sign off on it so it’s all legal. Sure enough, the settlement payments stop and the company confirms they have started receiving them and that your lump sum will be in your account soon.
So you wait. And wait. And wait some more. But the money never arrives. You call the company and you they tell you your payment is “processing” and should be paid to you soon. So you wait another week and no money arrives. You call again and this time the representative says that they have no information for you at this time. You ask for the supervisor who they say is unavailable. This continues for weeks, weeks turn into months; all the while bills are mounting and this company who said they wanted to help you is collecting your money and giving you nothing in return. You could take the company to court, but that takes more time and more of your money. You may win the case, but the award may take the form of a structured settlement which, if you’re not careful, could start the whole ball of wax over again. The moral of the story is this: be careful of who you trust with your money, because you may never see it again.