Catherine Byerly, Writer
  • Written By
    Catherine J. Byerly

    Catherine J. Byerly

    Staff Writer

    Catherine J. Byerly has worked in digital communications for the past four years, handling everything from award-winning, on-air public radio casts to writing in-depth investigative stories for business news sites.

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  • Published: September 28, 2015
  • 5 min read time
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APA Byerly, C. J. (2022, November 21). Customer Spotlight: Selling Annuity Payments Holds Off IRS, Foreclosure. Retrieved June 8, 2023, from

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When caught up with retiree David Gaynes, he was sitting in a pine rocking chair overlooking the Appalachian mountains with a cup of coffee in his hands – but he said if it wasn’t for selling annuity payments he could have been sitting in a jail cell – or in foreclosure.

"There’s no such thing as living over time without unexpected expenses."

A perfect storm took place for Gaynes in 2008 when he had a stroke. An advertising executive at the time, he said he was forced to collect disability because he could no longer work at the level he had for more than 20 years. And with that came a sudden shift to living on a fixed income.

Fortunately for Gaynes, his fears of the IRS coming after him for tax evasion or his mortgage company foreclosing on his dream house never came close to happening, largely because he was able to tap into the present day value of his structured settlement payments through CBC Settlement Funding, a partner of

Dream Home Becomes Black Hole

It all started with a problem many people are familiar with: suddenly having more bills than money.

“There’s no such thing as living over time without unexpected expenses,” Gaynes said.

“I had been living in the same house for 20 years. This is a 99-year-old craftsman style bungalow on a mountaintop in Asheville, N.C., which is a dream situation,” he said. “We have fabulous views and location. We are out of the city bustle. We coast down the hill and we are in the revitalized downtown of Asheville. ”

Living in his dream home was both a blessing and a curse.

“It’s an utter dream,” Gaynes said. “That being said, a 99-year-old wooden house accumulates a significant amount of deferred maintenance — especially after my stroke.”

For just a while it seemed he’d lucked out: Gaynes received a one-time gift from family for some renovations to the house.

“But renovations, as we know, are always more costly than expected,” he said.

When contractors found issues in the rafters, Gaynes’ funds were quickly depleted, forcing Gaynes to withdraw $40,000 from his 401k to cover the additional cost.

With the house finished, Gaynes thought he was ready to kick off his retirement, so he decided to leverage his 401K by converting the investment into a series of periodic income payments — theoretically ensuring that he’d have continuing monthly income. But then his finances, seemingly so bright, took a turn for the worst.

He discovered that, “I accidentally, as a post-stroke person, (had) unwittingly mislaid the document that reminded me that I had 40K in tax deferred savings,” he said.

Staving Off a Tax Nightmare

Gaynes said the document reminded him that he had forgotten to inform the IRS that he’d taken money out of his 401k early. And the IRS was suddenly demanding Gaynes pay more than $28,000 in penalties for the early withdrawal.

“Once I had annuitized my savings, I had absolutely no source of funds to get square with my favorite uncle,” Gaynes said, “So suddenly having access to funds in that amount would make the difference to owning my home or not or spending many years in prison.”

Facing prison over taxes may sound extreme, but consider that authorities weren’t able to catch famous gangster Al Capone on all of his shady dealings — but they were able to get him on tax evasion.

Gaynes could have made payments to the IRS. However, he said he was already living on such a tight budget that in order to make payments to the IRS he would have to give up his mountain top escape.

Suddenly, during a time that was supposed to be a reprieve after a lifetime of long hours in the advertising and newspaper industry, Gaynes found himself more stressed than ever worrying what would happen to him if he couldn’t come up with the cash.

“It is ever present and unforgettable when you’re under that kind of pressure,” he said.

“I sustained this grave medical condition and then accidentally ran highly afoul of the government and I had no personal means to set things right,” Gaynes said.

Selling Payments for a Good Reason

His first step was to call the company he purchased his annuity from. Surely, he thought, there was something that could be done in such an extreme situation. Unfortunately for Gaynes, that wasn’t the case at all.

“Every effort on my part was futile and discouraging,” he said. “When I learned from online research that there was such a thing as companies that had some willingness to consider offering a lump sum in exchange for the income stream, so to speak, this was literally a ray of hope.”

But the first company he contacted refused to even considering purchasing his payments. Next, he tried CBC Settlement Funding,’s financial partner.

“I called them with only the most guarded hopes. Because every conversation that I had had with my annuity company and other funding companies always concluded with ‘sorry I can’t do anything for you.’ ”

“I was thrilled to discover that there was (an) organization that retained a sense of human caring and human involvement.”

Gaynes said he was thrilled to find that not only were the people at CBC willing to work with him, but that the process was quick and painless.
“It is ever present and unforgettable when you’re under that kind of pressure,” he said. CBC transferred cash into his account in less than three weeks. “I was astonished by how efficiently they were able to step through the process and then once I was approved the very next day the funds were wired into my personal checking account,” Gaynes said.

With his tax issue resolved, Gaynes was quickly back to enjoying his retirement.

“I can’t overstate my relief and gratitude,” he said. “They enabled me to go from being deeply in debt with no way of resolving things to being free and clear and paid in full.”

Gaynes said it was the best ending of his series of troubles that he could have asked for.

“I think it is the unfortunate society-wide experience that people become accustomed to thinking of corporations and organizations as completely indifferent, unresponsive and inflexible — that they are simply a necessary evil,” he said, “And in fact I was thrilled to discover that there was (an) organization that retained a sense of human caring and human involvement.”


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Last Modified: November 21, 2022