Structured Settlements 4Real: What's Real in the Structured Settlements, Settlement Planning, Settlement Consulting and Litigation Recovery Management Space?

Patrick Hindert Melts Snow... Promoted "Squandering Plaintiff" Theory!

Continuing to expose Patrick Hindert's hypocrisy for his attack on the "squandering plaintiff" theory comes from a recent and unlikely source- a series of posts about Randy Snow, the parylimpian, the second of which Hindert posted in August 9, 2008. A portion is excerpted below.

Hindert asked: "Your injury occurred in 1975 - just prior to the beginning of the structured settlement industry industry in the United States in the late 1970s. Have you had any experience with structured settlements or injury award recipients?

Randy Snow: After becoming involved in wheelchair sports, I traveled and met many persons involved in accidents. Some of those persons received large sums of money. There are many inspirational stories. Personal injury victims who have successfully managed their recoveries and successfully redefined their post-settlement lives. Many of these stories involve structured settlements. There are also MANY horror stories. Accident victims who have SQUANDERED  their recoveries and their lives. I have a friend who received a $300,000 settlement in 1980. That was a pretty nice sum in those days. In two years, his money was gone. In my experience, accident victims who are matched with professional financial advisors and settlement planners are much better". 

Frankly when Hindert posted the Randy Snow interviews it really was a "WTF" moment. In hindsight at least one of them has proved to be useful in hoisting "Hedwig" by his own petard.

How can Hindert credibly spew hot air on the "pernicious" "90% squander in 5 years" theory when he' s been out there hanging on to every word and (in particular) promoting the "squandering" words of justification from the frickin' Bruce Jenner of wheelchair athletes? 

Read June 24, 2009 "The Squandering Plaintiff Redux"

Bankruptcy and the $150,000 a month Athlete

London's Daily Mail reports that former Manchester United midfielder Eric Djemba-Djemba, 26 now plying his trade in Qatar, was in such dire financial straits when at Old Trafford - despite his £75,000-a-month wage - that it is alleged he relied upon appearance and win bonuses to get by. It is also claimed the Cameroonian (who played for "the Mancs" from ages 22-24) ran a fleet of 10 4x4 vehicles and juggled 30 bank accounts at the time". He was declared bankrupt in at a Birmingham, England court last September.

One of the super market tabloids that I've browsed from time (while waiting in line) has a recurring section called "stars they're just like us" where readers can see stars doing activities of daily living. In this case some soccer players and other athletes share a similar need to protect against wasteful dissipation of their assets with a profoundly injured person who is about to receive a large settlement or award. In the athletes case their career could end suddenly and without proper preparation they could be in serious financial trouble. Unlike the athlete the tort victim may not have the capacity to earn back their mistakes.

Structured settlements, trusts and deferred income annuities and types of financial vehicles can be used to help preserve what has been won or earned.

Pathetic Situation Demands Better Solution

Here's a little "up yours" to the "cash now" companies who use "live your dreams" advertising.

On December 26, 2002, Powerball winner Jack Whittaker won just under $315,000,000! He elected the lump sum distribution option, paying him approxmately $113,000,000, in lieu of guaranteed future periodic payments. Now just over 4 years later he's broke. This is a story has got to be one of the greatest cases of sudden wealth syndrome financial mismanagment in history.  The story can be found here (2007 story), here and here (2005 story).

Perhaps state governments ought to mandate that a certain percentage of lottery winnings , if over a certain size, be paid out periodically. Some may say that is patronizing, but consider that full dissipation puts people on the dole and a fresh burden on the taxpayer. From a public policy standpoint something is terribly wrong. A yes/no decision at the local newspaper stand after forking over a couple of bucks hardly qualifies as financial planning.

Had Whittaker been able to accept even 10-20% of his winnings in the form of periodic payments, in lieu of all or nothing it might've saved him financially.  Had he accepted the whole thing in the form of payments over time he could have blown all his money up to that point, learned his lesson and gone on to living happily every after...at least from a financial standpoint.

Does J G Wentworth Forum Shop Until It Gets Approval?

I received this letter today from a Ms. SB Cheek of California. Read it! I think it says a little something about the enforcement of the California Structured Settlement Protection Act. Apparently the judge reviewing the case determined that selling the structured settlement payments rights was not in the payee's best interest and denied the transfer application. Ms. Cheek's letter suggests that JG Wentworth (321 Henderson) proceeded, or attempted, to find a judge that would agree to the sale. Is this forum shopping happening in other states?

I'm interested in hearing from readers, members of the public and other factoring companies with what they may have experienced in this regard. Opinions are always welcome as well.

"Dear Mr. Darer,

Woa, my child's dad , a 95% burn victim ,complusive gambler, has called the JG Wentworth folks on the TV, after losing all of his worker's compensation money to gambling.  I searched and searched for an attorney to help us.  Finally after, being taken for money from some attorneys and NOT represented, I went to the courts myself with all evidence.  Needless to say the judge did deny him the right to cash in this income.  I was relieved for a few moments, but now find that he is being advised to seek another judge in the matter; not cease what he is trying to do. 

This seems so unethical of J G Wentworth (321 Henderson Co.).  They have not one care about the dependent problems. 

I understand that criminal charges can be lodged for the mishandling of the Ca. Workers Compensation Income that was clearly marked for hospital bills never paid and I understand, also for the dependents care.  But as a burn victim he feels the law would not punish him.

Any advice is welcome to get this monster off our backs.

S B Cheek

you have permission to reprint this."

The Long Term Consequences of a Bad "Cash Now" Decision

I often receive a call or an email from someone who sold the rights to their structured settlement payments to a factoring company, settlement transfer company, or settlement purchaser, who now regrets their decision and is seeking recourse. Unfortunately for many of them its a case of caveat venditor, or "seller beware"

Today's email involved a gentleman who, in 1997, sold rights to $867,000 in future payments over the then following 23 years to JG Wentworth for $110,000! That was a hefty discount even then. The payment rights sold were deferred tax free lump sums clearly set to milestone years in this man's life. Clearly he wishes he had those structured settlement payments to look forward to now.

If you are considering selling your structured settlement payment rights speak with a financial professional, unrelated to the company seeking to buy your payment rights. to make sure there are no better options. At the very least, sleep on it and then, with a fresh mind, think of the long term implications. Learn from the experiences of these other folks.

And, if you have resolved that you must sell, don't succumb to pressure tactics from the buyer. If you make it through the Court approval process now required in 46 states,  make sure to write down your reasons on a piece of paper, and save it. This way should you come to regret the decision in the future you can open your "time capsule" and have a reminder of why your younger self traded away your long term security. Learn from the experiences of others!

Nitaninny Lyin

At 314AM  EST on Friday November 3, 2006, almost 2 hours ago, I was suddenly awakened by the phone from a foul mouthed punk calling from King of Prussia Pennsyvlania who wanted to sell his (rights to) structured settlement annuity payments from First Colony Life. No offense meant to anyone from Penn State, but for the purpose of this story I will dub him "Nitaninny Lion".

In my "shocked out of deep rem" haze I can recall that he purported to have rights to receive $346,000 in future payments over 18 years in exchange for which JG Wentworth was offering $82,000. Apparently JG Wentworth has quoters available in the middle of the night for wee hour desperados. Moreover he alleged that JG Wentworth promised him the money in 4-6 weeks.

Apparently he had already ruled out a non competitve bid from Peachtree Settlement Funding.  The guy said he wanted to start a restaurant and although he was 22 he felt that his education at Penn State University was sufficient to take on the risk of running a restaurant.   He claimed to be receiving a discount rate of 14% plus some tack on fees-which would of course bring the effective discount rate to above 14%. which he didn't realize in his inpatience. He could've probably done better.

2 minutes later "Nitaninny Lion" calls back (at this point "Nitaninny Lyin") claiming to be James Wilkerson from Florida, with one of the worst attempts at aping a deep South Georgia accent. This time he says he got a quote from Patriot Funding for $32,000 in exchange for $288,000 in future payments, he was 28 years old, he described some annuity payments-this time from Pacific Life, but said the contract was with his ex-wife. He hangs up once he realizes he's been made (I look at caller ID).

Now "Nitaninny Lion" may have had a legitimate need to sell those payments and he may have been qualified to run a restaurant but until he develops a sense of maturity in the business world he's destined to fall flat on his face. It's a pity, but perhaps that's what he deserves.

Who Can You Trust? What a Nightmare!

Nelly sold a structured settlement to JG Wentworth in the year 2000 and 2001. At the time she did not have a bank account to put the money into. One of her friends (or so her friend said) had put it in her account "until Nelly could open up one of her own". When Nelly did her "friend" said that she had put the money elsewhere and Nelly asked her repeatedly to give Nelly her money that was owed to her. Read the full story posted on 9/11/2006 on Lexis Nexis and the following email threads by following this link

While these transactions occurred prior to the enacting of the state Structured Settlement Protection Acts, this is illustrative of the sleazy dealings that can happen when money comes between people. Seek independent professional advice up front and get things in writing!

Sudden Wealth Syndrome Addressed on Today Show

According to a recent article by MSNBC entitled "The Dark Side of Financial Windfalls", "financial experts and recipients of unexpected sums of money say it’s common for such newfound wealth to feel more like a burden than a blessing — especially if the windfall came as a result of a loved one's death."

Some windfall recipients, a category which includes, among other things, those receiving proceeds from  insurance claims or lawsuits , "impulsively quit their jobs or leave their spouses even though they haven’t come into enough money to make them independently wealthy. Others spend the money far too quickly without planning adequately for the future — or for the taxes they don’t realize they owe."

When it comes to legal claims and law suits there are often critical time sensitive decisions that must be made. Working with a competent settlement professional or settlement adviser, for those with legal claims or lawsuits, is a good way to get your arms around the issues. Attorneys for plaintiffs should also consult a settlement professional to help with the closing process.  A settlement professional can provide valuable input, experience based knowledge and other services to help all parties, particularly the settlement recipients and their attorneys.

Another aspect of financial windfalls mentioned in the MSNBC article and something I have observed over the years is that some "experience a paralyzing fear of doing something wrong with the money — and, as a consequence, they waste" time, even "years doing nothing at all. And most experience a change in relationships with family members and others they have loved and counted on for years." Experienced settlement professionals may be able to help such individuals by drawing on their experiences with others. 

Some structured settlement payment recipients are targeted by certain predatory factoring companies seeking to induce them to sell their structured settlement payment rights. While there seem to be legitimate places for such transactions (for example the testimonial examples recently posted by Rhonda Bentzen on her weblog), misleading expectations created by the misleading advertising  and high pressure sales tactics by some of Bentzen's competitors are encouraging a needless step to the same dark side cited in MSNBC's article. Such individuals should contact a financial professional who will take the time to help them evaluate the transaction and other alternatives that may be available.

Johannesburg Amsterdam

On Monday afternoon I received a call from someone inquiring about JG Wentworth with a sense of urgency. Apparently the man found my number after reading one of my JG Wentworth blasts on Structured Settlements 4Real. Rest assured if you read this blog you stand assured that we have nothing to do with JG Wentworth. However I was curious about the caller and probed a little further. He said he needed some help with a settlement. I asked if he had a lawyer advising him and he said no but he needed to file something in probate Court and set up a bank account to receive an inheritance. I probed further and he related that it was from overseas. Eyebrows raised when I asked "where from?" and he replied "Johannesburg, Amsterdam!"  I asked him if he even knew "the deceased relative" and he said no, "but the letter was from the "Federal Bank of the United Kingdom"" Are you laughing or crying yet?

Immediately I know this guy is probably getting scammed and gently burst his bubble. This guy woke up Monday morning and thought he was going to live the "dream". Ironically the suckers "dream" chord being struck by the scammers is not unlike the "dream" chord strummed by factoring companies like JG Wentworth.

What is the point? 

• The bank doesn't exist
• Johannesberg and Amsterdam are from different continents.
• People receive bogus solicitations on the Internet
• People receive legitimate solicitations on the Internet
• People use the internet to find information
• It's important that good accurate non-confusing information resources are there for consumers
• Consumers need to be educated on how to better use the Internet as a resource. In particular they need to know how to check out and verify the legitimacy of a source of information.
• You can't assume common sense will prevail

Buyer Yields Expensive Fruit From Structured Settlement Tree

A structured settlement broker from one of major structured settlement brokerage firms (creation not destruction) tells this story about what occurred when he was in a New York state court waiting for his case to be called. Peachtree Settlement Funding is there with a client who was attempting to sell her structured settlement payment rights and was there seeking Court approval pursuant to Title 17 of the New York State General Obligations Law (i.e.  The New York Structured Settlement Protection Act or SSPA).

My "fly on the wall" happens to hear the terms of the "deal"  on the table for the Court's approval. Apparently the seller of the structured settlement payment rights was going to sell two lump sums totallng $130,000 for $30,000! Now that's what I call fresh squeezed!

Instead of the Society of Settlement Planners perhaps Peachtree should consider the "Sour Citrus Society". Bleeccccch!