There are several important distinctions between an annuity buyout loan and the way in which
J.G. Wentworth helps people get cash for their annuity payments.
Annuity buyout loans can take several forms, however, typically, in an annuity buyout loan,
the borrower would receive an amount of cash which is then paid back with a certain number
of the borrower’s annuity payments, and guaranteed by some of the borrower’s other assets.
J.G. Wentworth does not make annuity buyout loans such as this. Instead, J.G. Wentworth
actually purchases future annuity payments from their owners in exchange for a lump sum
of cash today.
There are several advantages to the outright sale of future annuity payments over
annuity buyout loans. The first and perhaps largest advantage is that when annuity
payments are sold, versus an annuity buyout loan, no debt is created by the seller
of the payments.
In addition, the sale of annuity payments is superior to an annuity buyout loan because
it cannot affect an individual’s credit rating. For instance, suppose an individual has
an annuity buyout loan that is paid back with the cash they get from their regular annuity
payments. If for some reason, their annuity payments are interrupted or delayed, the
borrower may fall behind in their loan payments and as a result could default on their loan
and impair their credit rating. This impairment of their credit rating could adversely
affect their ability to get a loan in the future.
While in some instances a loan may be best, J.G. Wentworth believes that the outright sale
of future payments can offer individuals significant advantages to meeting the many financial
challenges they may face.