So they turn to a company that buys "structure settlements" resulting from a lawsuit or personal injury matter to access their money that otherwise is paid out over many years through an annuity.
One growing company in the industry is Lauderhill-based 123 Lump Sum. The 13-year old business generates
"We try to understand our customers current financial needs and design a transaction that is customized to fit those needs, rather than just simply buying out the entire annuity," said
Co-founders Savysky and
Now in their 40s, Asseff and Savysky say they've built a firm that helps consumers access money they otherwise couldn't for pressing needs, such as medical bills or to stop the foreclosure on a home. Lately, many customers have been using proceeds to purchase or lease new houses or apartments.
"The aftermath of the financial crisis left a lot of consumers with financial needs related to housing," Savysky said.
123 Lump Sum's website invites people to "live the life of your dreams" by selling a structured settlement or annuity for "financial freedom." It depicts consumers driving a sports car, traveling or buying a home as possibilities for those who sell their future cash streams.
The happy pictures of people on 123LumpSum.com are for marketing purposes, Savysky said. "You have to present a website that's something consumers will respond to. You don't want to have only down-and-out pictures," he said.
The website also appears to offer cash advances on pending lawsuit settlements, but Savysky said that business is referred to another company.
More often, people decide to sell their future cash flows for more pressing needs, such as medical bills or avoiding eviction on their home, the business partners say.
Financial planners warn consumers to proceed with caution on selling a future income stream and to do their homework on the structured settlement company.
But if the consumer opts for a sale, "shop it around like you would anything else, receiving multiple quotes from companies and get it in writing," he advised.
Make sure you understand all the fees involved and consider whether you're better off getting a loan from a family member or even a bank at today's lower rates, Saneholtz said.
123 Lump Sum was a founding member of the
Structured settlement companies were once known for buying lottery winnings, but most states including
After competitors Peachtree Settlement Funding and
Last year, the partners sold a minority interest to
"They're well-positioned to be the No. 2 player in the industry," he said.
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