Day: June 23, 2019

“CASH NOW” IS NOT “CASH NOW”Originally Posted on January 12, 2015, last updated on February 13, 2016 and reposted on June 23, 2019

-THE LEGAL REALITIES OF Selling an Annuity or Structured Settlement for “CASH NOW”

 

We have all seen the commercials:

  • It’s my money, and I want it now!” – Or:
  • “It’s your Money – Use it when you need it”
  • “GET CASH NOW” for your Structured Settlement!

ALL are very popular and very expensive advertising campaigns put on by companies such as J.G. Wentworth, Peachtree Financial, and similar companies engaged in the business of purchasing structured settlement payments, lottery and casino jackpots, and annuities (hereinafter “future payment streams”), for a significantly discounted present day value.

Unfortunately, however, what all the commercials and the catchy “CASH NOW” phrases don’t tell you is that: CASH NOW, DOES NOT ACTUALLY MEAN CASH NOW!

WHAT “CASH NOW” TRULY MEANS

There are 3 PRIMARY “unspoken” truths that most companies that advertise generally do NOT want you to know about (at least NOT at first), when you initially see their Television Commercial, or locate them on the Internet. Those 3 realities are:

1. That “CASH NOW” really means that the SOONEST you will be able to receive “YOUR MONEY” will probably be about 90 DAYS AWAY; if you are lucky!

2. That a completely SEPARATE COURT PROCEEDING IS ALSO REQUIRED FIRST, where a Judge must ACTUALLY determine that it is both in the “best interests” of the seller, as well as any dependents the seller may have; AND

3. Most Important, that the FINAL AMOUNT that a seller can expect to receive for their payments WILL BE FAR LESS “CASH NOW” than the actual “face dollar amount” of the payments that are being sold!

THE LAWS “BEHIND THE CURTAIN” OF THE “CASH NOW” INDUSTRY

Due to the long history of predatory practices in the industry of buying future payment streams , numerous laws on both the Federal and State levels have been adopted in order to “protect people that are seeking to sell their future payment streams”.

 

These laws are commonly referred to as “consumer protection legislation”, and vary slightly from state to state. But, all of these laws, however ALSO have TWO primary GOALS in common:

1. To make sure that sellers of future payment streams are not misled, or taken advantage of by companies wishing to purchase their payment streams; and

2. That it is actually a “good idea’ and in the “best interests” of the seller to liquidate a future payment stream for an amount significantly less than the actual “face value” amount of the payment stream.

For specific references to the Federal Law that governs the sales of ALL Structured Settlement and Annuity payments please see: http://uscode.house.gov/download/pls/26C55.txt

Also note that in addition to the federal Law, located at 26 U.S.C. 5891, 47 individual States have also adopted similar laws, all “modeled” the Federal law governing the “protection of sellers”. Depending on where a person wishing to sell their structured settlement payments resides, those individual State Laws can be located, by clicking here.

SHOULD A PERSON NOT SELL THEIR STRUCTURED SETTLEMENT OR ANNUITY PAYMENTS?

Does that mean that person who is seeking to sell a future payment stream should NOT do so? NO-OF COURSE – NOT! It simply means that any person wishing to sell a future payment stream UNDERSTAND exactly what they are doing, and also what the PROCESS actually entails.

Especially, in these changing economic times, with the country facing a possible another “recessionary” period, many people find themselves in “un-foreseen” circumstances that require making “difficult decisions”, including the liquidating of assets such as structured settlement annuity payments in order to address immediate “cash flow” problems, such as un employment, mortgage foreclosure issues, or even simply a need to pay the most basic costs of living expenses.

So, selling annuities, structured settlements, lottery, casino jackpots and other types of future payment streams for “liquidity” has become just a basic reality of the current economic climate for many average middle-class Americans.

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How the process of selling structured settlement payments really works – and what every possible seller must know before agreeing to enter into a contract with any company

 

A. TWO SEPARATE “DISCOUNTS” OF A SELLER’S PAYMENTS ARE USED TO DETERMINE A CONTRACT PRICE

1. Once a person agrees to accept an offer from any company – and before any contracts are issued – the purchasing company will go through a two-step process to reduce the actual value of the payment stream to be sold.

A. First, the total value of a person’s future payment stream is “discounted” to a “present day value” using a Federal Rate as established by a monthly rate that is published by the IRS for the purpose of valuing annuities for “estate”. For a detailed reference as to how that rate is calculated, please refer to: http://www.irs.gov/pub/irs-drop/rr-11-14.pdf

For reference purpose, that rate is currently averaging between 2.4% to 3%.

B. Next, and this is critical, the company will then use that “present day value” to then assess the “profit margin” that they are going to seek to make from the purchase of a seller’s (your) payment stream.

More important, that second discount is NOT based on any rules, or regulations, but ONLY upon how LITTLE the company can get a seller to agree to for their “future payment stream”. And the author of this article, having personally handled over 8,000 transfers – has seen the “end” interest rates charged to sellers range from between 8.0 to 29.9% – all based on what the company can “lure” an “un-sophisticated” seller into accepting!

the Steps that every person contemplating a sale of their “structured settlement/annuity payments” – should do to protect themselves before any contracts are ever signed

 

For more information please check these websites:

http://eahtirski.com

http://structuredsettlementexpert.co

http://structuredsettlementatty.com

http://structuredsettlementadvisor.info

Originally posted 2015-01-12 22:07:04. Republished by Blog Post Promoter

The post “CASH NOW” IS NOT “CASH NOW”<span class="entry-meta">Originally Posted on January 12, 2015, last updated on February 13, 2016 and reposted on June 23, 2019</span> appeared first on Structured Settlement Expert.

Structured Settlement LoansOriginally Posted on January 16, 2015 and reposted on June 23, 2019

Structured Settlement Loans

Facts on Why Structured Settlements are Not Used as Collateral for Bank Loans:  You Can Try, It’s Not Against the Law

 For a thorough explanation on this matter; structured settlement loans, we turn to the National Association of Settlement Purchasers (NASP); the only trade association related to the sale of structured settlement payment rights.

Legislators, regulators, courts, judges, insurance companies, structured settlement brokers, plaintiff’s lawyers, and others look to the NASP and its members for credible and reliable insights to the sale of structured settlement payment rights; just like we look to them for an explanation as to why structured settlements are not used as collateral for bank loans.

The Reason

According to NASP, using your structured settlement as collateral for a bank loan is only “…an option if you have good credit and are willing to take on additional debt.”

NASP’s Explanation

“Unfortunately, few banks will take your payments as collateral.  That is because even using your payments as collateral is considered a transfer that must be approved by a judge.  Banks typically don’t want to go to the expense and inconvenience of getting court approval just to issue a loan.  What’s more, a company that purchases or loans against structured settlement payments must agree to take on certain obligations from the insurance company.  These include certain fees and agreeing to pay for the insurance companies’ litigation expenses if there is ever a lawsuit relating to the transaction (called indemnity).  Most banks are unwilling to take on these obligations.”

https://nasp-usa.com/settlement-transfers/secondary-market-faq/

Most Important

Plus, you must remember, federal law designed to provide these benefits to you on an income tax-free basis, which prohibits you from assigning or encumbering them. http://www.nssta.com/structured-settlements/already-have-structure

 Best to Consult an Independent Professional Adviser

See what your options are first.

Originally posted 2015-01-16 21:29:24. Republished by Blog Post Promoter

The post Structured Settlement Loans<span class="entry-meta">Originally Posted on January 16, 2015 and reposted on June 23, 2019</span> appeared first on Structured Settlement Expert.

Structured Settlement Expert Advisor for InvestorsOriginally Posted on March 10, 2015, last updated on June 25, 2015 and reposted on June 23, 2019

Structured Settlement Expert Advisor for Investors

Allan S. Roth, founder of Wealth Logic, an hourly-based financial-planning firm in Colorado Springs, noted in the Wall Street Journal on November 23, 2012 that he had recently purchased a “structured-settlement” annuity to find “relatively safe higher income and returns”. Mr. Roth further inferred that a number of investors are also seeking to purchase these pre-issued annuities as a form of “safer”  investment planning.  However, Mr. Roth’s experience in the purchase of such a pre-issued and/or factored annuity was less than stellar. Why?

Lack of proper due diligence, and in the blog entitled “Another Can’t-Miss Deal?” Mr. Roth emphasizes that these are complex transactions and the blog focuses on what can go wrong in the purchase of such  a pre-issued annuity. Taken as a whole, the article seems to emphasize that at any investor seeking to purchase such an annuity needs to be careful and engage in proper due diligence. Roth further noted that ” If I was successful in catching all the errors in the documents, I bought an attractive cash flow from a highly rated insurance company yielding 5.625% annually. Yet there is a lingering doubt that I didn’t catch everything”.

Roth  then continues to quote Jason Zweig’s Intelligent Investor column, “Another Can’t-Miss Deal That Can Miss Spectacularly,” which ran on July 23, 2010 in the Wall Street Journal and states: “Zweig was absolutely right when he wrote that these deals are complex and can miss spectacularly.” The lesson is simple; if someone is seeking to spend tens or hundreds of thousands of dollars on a pre-issued annuity as an investment then retaining an independent professional advisor (“IPA”) to underwrite the transaction from the investor’s perspective is critical.

What is an IPA? An IPA is simply either an expert, and/or attorney that is experienced in the purchase, sale, and “factoring” of a pre-issued annuity. Further a qualified IPA will make sure that all legal and statutory compliance issues are met, plus independently corroborate and verify that all documents provided by the factoring company and/or broker are not only accurate, but also in full compliance with all internal insurance company administrative polices required to secure the transfer of payment rights to the investor.

Eugene A. Ahtirski, Esq. is a nationally Recognized Expert and Independent Professional Advisor in all areas of Secondary Market Transfers of Future Payment Streams. Having personally participated in over 10,000 transfers of structured settlement annuities over the past decade, Mr. Ahtirski is one of most experienced and sought after advisors in the structured settlement annuity factoring industry.

 

To locate a qualified IPA;  you could google search structured settlement IPA or Independent professional advisors. Also contacting your local state bar association to get a lawyer referral.

Eugene A. Ahtirski, Esq. is a nationally Recognized Expert and Independent Professional Advisor in all areas of Secondary Market Transfers of Future Payment Streams. Having personally participated in over 10,000 transfers of structured settlement annuities over the past decade, Mr. Ahtirski is one of most experienced and sought after advisors in the structured settlement annuity factoring industry.

 

 

Originally posted 2015-03-10 13:47:23. Republished by Blog Post Promoter

The post Structured Settlement Expert Advisor for Investors<span class="entry-meta">Originally Posted on March 10, 2015, last updated on June 25, 2015 and reposted on June 23, 2019</span> appeared first on Structured Settlement Expert.