The Berkshire Hathaway Hardship Exchange Program, Explained

The Hardship Exchange Program is a buy-back program run by Berkshire Hathaway Group Structured Settlements, the annuity operation behind several Berkshire insurance entities. If your structured settlement annuity was issued by a Berkshire company and you are facing genuine financial hardship, Berkshire may purchase a portion of your future payments back from you directly, instead of you selling those payments to an outside buyer.

The program exists for a simple reason: Berkshire would rather retire its own payment obligation at a modest discount than watch its annuitants sell payments to third-party buyers at much steeper discounts. The company launched the program in 2017 after years of formally objecting to transfer deals it considered unfair to its payees.

Here is the part most buyers will not tell you: if you qualify, this program will usually beat any offer from the secondary market - including ours. We would rather you know that up front. If you hold Berkshire paper and your situation is a true hardship, call Berkshire before you sign anything with anyone.

The program only applies to structured settlement annuities issued by Berkshire Hathaway Group companies. Check your benefits letter, annual statement, or the annuity contract in your settlement documents for any of these names:

• Berkshire Hathaway Life Insurance Company of Nebraska
• First Berkshire Hathaway Life Insurance Company (New York payees)
• National Indemnity Company
• Columbia Insurance Company

If your checks come from a different insurer - MetLife, Pacific Life, Prudential, or any other issuer - this program does not apply to you. See our issuer guides for how transfers work with your specific insurance company.

Not sure who issued your annuity? Request a benefits letter. Our guide on getting your annuity benefits letter walks through exactly how.

The process runs in three stages:

• 1. Hardship application. You contact Berkshire Hathaway Group Structured Settlements at 1-402-916-3799 - the number Berkshire publishes for this program in its payee letter - and describe your situation. (Berkshire's main payee services line is 402-916-3100 if you cannot get through.) Berkshire evaluates whether it meets their hardship standard - things like medical bills, housing emergencies, or loss of income. This standard is stricter than what a court applies to an ordinary sale: wanting cash for an investment or a discretionary purchase generally will not qualify.
• 2. Berkshire approval and offer. If Berkshire accepts the application, it makes an offer to purchase a portion of your future payments. Industry reporting has placed the program's pricing at an effective discount rate of roughly 6.5 percent, plus a $1,000 administrative fee payable if the transfer is approved. Terms can change, so confirm current pricing with Berkshire directly when you call.
• 3. Court approval. Even though Berkshire is the annuity issuer, the buy-back is still a transfer of structured settlement payment rights, so a judge must approve it under your state's Structured Settlement Protection Act, the same as any other sale.

One practical caveat reported by payees: because this is a service program rather than a sales operation, response times can be slower than commercial buyers. If your timeline is measured in days, factor that in.

Discount rates in the secondary market commonly run in the double digits - roughly 9 to 18 percent or more depending on the buyer, the payment stream, and how far out the payments sit. Berkshire's reported hardship pricing of about 6.5 percent is materially better than that range, and it is not close.

A simplified example: suppose you are selling $50,000 of payments arriving over the next five years. At a 6.5 percent discount rate you would receive in the neighborhood of $42,000 to $43,000. At a 14 percent rate, a typical mid-market factoring price, you would receive roughly $34,000 to $36,000. The exact numbers depend on the payment schedule, but the gap is real money - often five figures on a mid-sized deal.

Why can Berkshire out-price every commercial buyer? Because it is not investing in your payments - it is canceling its own debt. A commercial buyer has to fund the purchase and earn a return spread. Berkshire simply stops owing you the money, so any discount at all is worthwhile to them. No third-party buyer can structurally match that, which is why we tell Berkshire payees with genuine hardship to make that call first.

Use our structured settlement calculator to see what different discount rates do to your payout, and our guide to how discount rates work to understand any offer you receive - from anyone.

The Hardship Exchange is the right first call for some sellers, but it has hard limits:

• Your annuity is not Berkshire paper. The program is exclusive to Berkshire-issued annuities. Most structured settlements in the US were issued by other insurers.
• Your reason does not meet their hardship standard. Berkshire applies its own screen before anything reaches a judge, and it is stricter than the court's best-interest review. Debt consolidation, a business opportunity, a home purchase, or simply wanting liquidity are legitimate reasons a court can approve - but they are generally not hardships Berkshire will fund.
• Berkshire declines the application. An application is not a guarantee. If Berkshire says no, selling on the secondary market remains available, and court approval still protects you.
• Timing. If you are working against a hard deadline, the program's slower pace may not fit.

If any of these describe your situation, the ordinary sale process applies. Start with our guide on how selling structured settlement payments works, and always compare more than one offer.

You can still sell Berkshire-issued payments to a commercial buyer - the program does not take away that right. But you should understand something about how those cases go.

State law requires that the annuity issuer receive notice of every proposed transfer and the court hearing. Berkshire reads those notices, and its own payee materials state plainly that if a payee is offered poor economic terms, or if a buyer withholds important information from the court, Berkshire may intervene in the case to make sure the payee and the judge know.

In practice, that can mean Berkshire files information with the court or, in hardship situations, puts its own better-priced alternative in front of the judge. When the company that owes the money offers a materially better deal than the outside buyer, a judge weighing your best interest has an easy comparison to make. Transfers priced far below Berkshire's alternative face a real risk of being denied.

The takeaway is not that selling Berkshire payments is impossible - non-hardship transfers at fair pricing proceed through court like any other issuer's. The takeaway is that a lowball offer on Berkshire paper is likely to fail, and any buyer quoting you aggressive terms on a Berkshire annuity either does not know this or is hoping you do not. Read our guide on why courts deny transfers for the broader picture.