There are new uses for structured settlements from the secondary market is becoming popular. Re-factor annuity structured settlement payments from the primary market that has been sold by the original payee for the factoring company. Factoring company then sells the payment to the third party buyer who package and resell it as a secondary market structure plaintiff factor for settling personal injury cases. Annuity Re-factor has been getting attention because they can produce a rate of return that is higher than what is currently being paid in the primary market.
Structured settlement factor that is not the same as the main structure, and the plaintiffs and their counsel should be aware of what a difference.
Tax issues and Structured Settlements
While the main structured settlement offers some significant tax advantages, such as tax-free principal and interest payments, annuity re-factor does not bring benefits. They are considered regular investments and will be subject to federal, state and local taxes. Annuity factor may offer higher returns to the buyer, however, it is important to calculate the actual return after taxes when making a comparison with other structures.
Transaction Transaction risk factors
Transaction counts is the result of a series of purchase and sale transactions, from the original claimant as a seller to a new plaintiff as a buyer. This series of steps to add the element of "transactional" risk that, while minimal, should be considered by the ultimate purchaser. This risk is why it is important to deal with a leading factoring company and knowledgeable when buying transactions are taken into account.
Primary structured settlements set directly between the issuer and the recipient of the annuity, so that there is a direct contract between the insurer and benefits. The direct connection has no transactional risks are taken into account transactions.
Creditor protection Structured Settlements
Primary structured settlements are protected from creditors in accordance with their legal protection. Even in bankruptcy proceedings, they are usually regarded as exempt assets and inaccessible to creditors. After passing through a series of transactions structured settlement purchases and sales to be re-factor annuities, lose this protection. It then becomes like other investment and open to the rights and claims of creditors, bankruptcy trustees and other claimants.
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