Settlement Funding Archives - Survivors Rights

For thousands of childhood sexual abuse survivors, receiving a financial settlement was supposed to provide some measure of relief after years of waiting for accountability. But survivors involved in Los Angeles County's $4 billion sexual abuse settlement are now facing another difficult decision: Wait years to receive their compensation in installments, or accept a smaller lump sum from a private company willing to pay them immediately? An October 9 investigation by the Los Angeles Times found that funding companies have been contacting survivors with offers to purchase their future settlement payments, sometimes at substantial discounts. Some survivors say they need the money now to cover basic living expenses, medical treatment or housing. Others are questioning how companies obtained their private information in the first place. How Settlement Payment Companies Make Money The arrangement is relatively straightforward. A survivor who expects to receive settlement money over several years agrees to transfer some or all of those future payments to a funding company. In exchange, the company provides a smaller amount of cash upfront. When the settlement installments eventually arrive, the company collects the payments it purchased. For example, someone expecting $100,000 in future payments might agree to accept $80,000 immediately. The company would receive the $100,000 as scheduled, making the difference its gross return before expenses. According to the Los Angeles Times, court records indicate that many survivors pursuing these arrangements receive approximately 80% of the value of the payments they're selling. But the discounts vary, and some proposed transactions have been considerably less favorable. In one case, a survivor agreed to sell rights to $90,400 in future payments for just $25,000. A representative for the funding company later said the unusually low amount resulted from an error and that the transaction would be corrected to provide approximately 72% of the payout's value. The difference between the immediate payment and the future amount can be substantial, particularly for survivors who are already responsible for attorney fees and other case-related expenses. Why Some Survivors Can't Afford to Wait Los Angeles County agreed in 2025 to pay $4 billion to resolve thousands of childhood sexual abuse claims involving county-operated juvenile detention facilities, foster care placements and other institutions. But the money isn't being distributed all at once. Payments are scheduled over several years, and additional delays have affected thousands of claimants amid investigations into possible fraudulent claims associated with parts of the litigation. Those investigations have complicated the settlement process, although allegations involving questionable claims should not be confused with findings against survivors whose cases are legitimate. Meanwhile, everyday expenses haven't stopped. The Los Angeles Times interviewed survivors struggling with medical costs, housing insecurity and the uncertainty of when their compensation would arrive. One woman who alleged abuse at MacLaren Hall, a former county-run children's shelter, said she sold her future payments because she was exhausted by the delays and wanted to move forward with her life. Another survivor described being at risk of eviction while trying to support her children. For people in those circumstances, waiting several years for the full settlement may feel less realistic than accepting a smaller payment today. Funding companies maintain that their services provide immediate access to money for people who need it. The concern is whether survivors facing financial emergencies can meaningfully evaluate the long-term cost of those arrangements. Survivors Question How Their Information Was Obtained The financial terms aren't the only source of concern. Several survivors told the Los Angeles Times that they received unexpected phone calls, Facebook messages and other solicitations from companies offering to purchase their settlement payments. Some were particularly alarmed because their sexual abuse lawsuits had been filed under pseudonyms to protect their identities. One survivor questioned how an out-of-state funding company knew about his claim when he believed that only his family and attorneys were aware of the lawsuit. Another challenged a company representative to explain how her contact information had been obtained. The reporting did not establish that every company obtained the information improperly. However, the unsolicited outreach has raised questions about privacy and the handling of sensitive survivor information. For someone who has chosen not to publicly disclose childhood sexual abuse, an unexpected solicitation involving a confidential legal claim can be especially concerning. The investigation did not establish whether the companies obtained the information through public records, referrals, third-party marketing databases or another source. Your Information Is Not Shared With Settlement-Funding Companies SurvivorsRights.com does not sell or share information submitted through its confidential case-review forms with settlement-funding companies. Information you provide is used to help connect you with attorneys who evaluate potential legal claims, not businesses offering cash advances or discounted payments in exchange for future settlement compensation. California Requires Court Approval for Certain Settlement Transfers California has laws intended to protect people who sell rights to structured settlement payments. Under the state's Structured Settlement Protection Act, covered transfers require court approval. A judge must determine that the arrangement is in the recipient's best interest, taking into account relevant financial circumstances and the needs of any dependents. The law also includes disclosure requirements and provisions addressing independent professional advice. These protections are important, but court approval doesn't necessarily mean a transaction is financially advantageous compared with receiving the original payments. Survivors considering an offer should understand exactly how much money they're giving up, how much they'll receive immediately and whether the arrangement affects attorney fees, expenses or other settlement rights. The legal requirements can also differ depending on the type of settlement and the state involved. What Survivors Should Consider Before Selling Their Payments There are legitimate reasons someone might prefer a smaller payment today rather than a larger amount years from now. An immediate lump sum could help prevent eviction, pay for necessary medical treatment or address an urgent financial obligation. But accepting an offer without understanding the financial consequences could leave a survivor with considerably less compensation than anticipated. Before transferring future settlement payments, survivors may benefit from obtaining independent legal or financial advice, requesting a complete written breakdown of the transaction and comparing offers from different companies. They should also clarify whether the proposed sale involves their entire remaining settlement or only particular installments, and whether any additional costs will be deducted. For survivors facing financial pressure, the period between reaching an agreement and receiving compensation can create an opportunity for other businesses to profit. The central issue isn't whether survivors should be allowed to access their money early. It's whether they have the information, privacy protections and independent guidance necessary to make that decision on their own terms.

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Sexual Abuse Survivors Face Pressure to Sell Settlement Payments at Steep Discounts

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Sexual Abuse Survivors Face Pressure to Sell Settlement Payments at Steep Discounts

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