Litigation

Serious Questions Concerning Factoring Company "Servicing"of Structured Settlements

By John Darer

Factoring Company Servicing of structured settlement payments. It's time to get it all out on the table before one of the big servicers goes belly up and someone has to learn the hard way.

Please read my previous post on the servicing of structured settlement payments by factoring companies.

Questions to be answered

• If a factoring company is "servicing" the entire structured settlement, but only assigned the structured settlement payment rights to a portion, what happens to the unassigned "serviced"payments if the factoring company goes belly up? 
• What role does the bankruptcy trustee have in such cases and is there any possibility that the structured settlement recipient's payments could be delayed for any reason, or that any extra cost could be levied on the structured settlement recipient as the result of the bankruptcy of the "servicer"?
• What disclosures, if any are given to the structured settlement recipient at the time the servicing agreement is set up? What advantages are there to the structured settlement recipient to agree to servicing?

Given J.G. Wentworth's published precarious financial position and strong bankruptcy rumors, and the rumors that others are having trouble funding their deals this is a timely and important question.

Preliminary research suggests that some annuity issuers may actually encourage servicing by factoring companies because they don't want to split payments. Please tell me that isn't true about any current structured annuity issuers!

It's time to get it all out on the table before one of the big servicers goes belly up and some poor structured settlement recipient has to learn the hard way.

I'm wondering why Patrick Hindert has chosen to wax pedantic about a paralympic wheelchair racer and other subjects while ignoring a relevant issue about what has basically become his recent life's work as the factoring industry's in situ representative in the NSSTA.

Full post as published by Structured Settlements 4Real on April 22, 2009 (boomark / email).