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Savvy Scot Off Kilter on Selling Structured Settlement Payments

by Structured Settlement Watchdog

A interesting blogger called Savvy Scot chronicles life abroad  (now lives in Scotland, got married in Thailand on the beach...). I'll be "sporran" you the details which you can read for yourself if you wish. Aye, but Scottie has strayed off kilter in a random effort about selling structured settlement payments. Let's give it a wee shoogle shall we?

What Savvy Scot Claims

"Once you sell your structured settlement, you assume no risk

I'd tuck into a nice Finnan Haddock over selling a structured settlement for pennies

When the funding source buys your income stream, they assume your risk too. You need not worry even if the payer defaults or goes bankrupt; it is not your headache. You are not answerable to anyone in such circumstances and no one can come back to you"

Analysis

1. Insurance companies cannot file for bankruptcy, but they can become insolvent. "Insurance is monitored and regulated by state insurance departments, and one of their primary objectives is protecting policyholders from the risk of a company in financial distress. When a company enters a period of financial difficulty and is unable to meet its obligations, the insurance commissioner in the company’s home state initiates a process—dictated by the laws of the state—whereby efforts are made to help the company regain its financial footing. This period is known as rehabilitation. If it is determined that the company cannot be rehabilitated, the company is declared insolvent, and the commissioner will ask the state court to order the liquidation of the company" The Insolvency Process (nolhga.com)
2. When sell your income stream you are going to lose money, the question is "how much?".
3. By selling your income stream for what typically amounts to pennies on dollar
4. If you then the pile of pennies on the dollar, you start of behind where you were before you sold. 
5. If you invest that money you are likely going to have to accept a greater investment risk than if you kept the structured settlement payments. 
6. Do you really think that the risk of New York Life (born 1845), the oldest living life insurance company writing structured settlement annuities today, going out of business is worth a trip to "pennies on the dollar heaven". See New York Life Insurance Company Structured Annuities (4structures.com). New York Life is almost as old as Jonathan the Seychelles tortoise  (born 1832), who at nearly two cenuries old, is the oldest living land animal. Meet Jonathan The Tortoise, The Oldest Land Animal In The World (allthatsinteresting.com)

Reality Check

Selling A Structured Settlement in 2024? Get The 411 on Cash Now. Don't Be a Victim (4structures.com)

CT Structured Settlement Seller Avoids Rot. Negotiator Helps Up Buyer's Offer By Over 30%

by Structured Settlement Watchdog

Structured settlement factoring is a guaranteed way to lose money. There's no way around that.  But if you have no choice and it's the only way to raise cash that you need, it is critical to shop around and not take the first offer. Avoid the rot.

If one must sell structured settlement payments, avoid the rot

Methods of shopping around

• Call around yourself.
• Get referrals from a settlement planner or an attorney.  You must still shop around.
• Online bidding platforms, if they really are legitimate and independently run.
  
• Use a negotiator not employed by a structured settlement buyer.

Note that while a judge may determine that the structured settlement buyer's offer is fair or reasonable, the judge is not your personal shopper and is neither responsible,  nor should be relied upon, to assure that someone selling structured settlement payments receives the best offer.

Case study

28 year old Connecticut resident whose structured settlement originated from a 2003 New York lead paint settlement with an insured of Nationwide Insurance Company.  According to our source, "Joel was almost duped into working with Anthony, a now former representative from Olympic Financial LLC (same Florida address as Highpoint Funding) who, in an apparent massive conflict of interest, apparently solicited an investment to the seller and claimed he was going to invest his money for him in a company he was building and offered quick return for more than double his money.  Anyone with a securities license would be censured and possibly lose their license over that. But it's the structured settlement factoring industry and for some highly suspicious undisclosed reasons, structured settlement payment buyers have escaped licensing and regulation of sales practices to the detriment of consumers across the land.

Joel was encouraged to move from New York to Connecticut to circumvent the tougher New York judges. - Anthony purportedly told Joel that he was personally giving Joel money to establish residency, pay rent, get ID’s, travel expenses, help with bills, etc.  BUT, Joel came to find out the credit card he was given was also being used by Anthony's cousin for nights out on the town, which Anthony and Olympic/Highpoint would later try to charge Joel for.

Enter the Negotiator

One phone call brought almost $47,000 in additional money from Olympic Financial LLC (Highpoint Funding) without changing the funding date or the funding company.

County/State: Milford, Connecticut
Case Number: DBD-CV-18-6026991-S
Structured Settlement Buyer: Olympic Financial LLC  (aka  Highpoint Funding LLC) Boca Raton, FL

Petition Date: 05/22/2018  Amended:  06/07/2018 Second Amended 06/25/2018

Payments to be transferred:

 

From10/6/2019 $587.61/month through and including 9/6/2048 (348 payments), increasing 3% compounded annually; and

 

$30,000.00 due 10/6/2019

$40,000.00 due 10/6/2024

$50,000.00 due 10/6/2029

Aggregate of Payments to be Sold: $438,852.84

Annuity Issuer: United States Life Insurance Company in the City of New York

Owner: American Home Assurance Company
Olympic (Highpoint) Original Effective Annual Rate: 9.4%
Original Olympic (Highpont) Offer: $150,501.77
New Offer: $197,500.00
New Effective Annual Rate: 6.5%
Additional funds negotiated by our source: $46,998.23
Case Result: Approved 6/27/2018

The Negotiator charges a fee of modest percentage of any increase that is negotiated, not from what is already on the table

"No Sense Crying Over Spilt Ill Wilk"

When the deal was re-negotiated, 3 days before court, the representative Anthony purportedly wept on the telephone for an hour, and stated he was “so screwed” and that he can’t believe Joel did this to him etc etc. 

 

 

 

 

 

Reckless Annuity.Org is the Wrong Place to Turn for Sell Structured Settlement Tax Advice

by Structured Settlement Watchdog

"Tax Implications of Selling Structured Settlement Payments, by Elaine Silvestrini is yet another example of where a staff writer at Annuity.org has attempted to tackle structured settlements and failed miserably.

If one reads the title Tax Implications of Selling Structured Settlement Payments one would expect to get a clear answer. But Elaine Silvestrini never even answers the question. Instead she devotes and droned on with a lot of stuff that is totally irrelevant to the title of the page. Elaine Silvestrini's work is totally useless to anyone seeking to learn the "tax implications of selling structured settlement payments". For example Elaine refers to 1035 Exchanges which have nothing to do with structured settlements or transfers of structured settlement payment rights.

Elaine Silvestrini has been around the block as a journalist. But Elaine Silvestrini has no professional credentials relevant to structured settlements or taxation and it shows. Elaine's bio on Annuity.org states she has been a professional journalist for more than 25 years and "she understands that through her work, she is a surrogate for her readers. Annuity.org says Elaine "is asking the questions and finding the information they need and presenting it clearly and simply".  A review of her cited sources demonstrate a high level of subject matter cluelessness.  None of the cited sources help in answer the question of the " tax implications of selling structured settlement payments". 

Elaine Silvestrini has won numerous awards, including several for her investigation into tax refund fraud in Tampa, Florida. Among the accolades for that work was a first place award from the Florida Society of News Editors for community leadership among Florida’s largest newspapers. Some of that work involved helping victims of identity theft whose information was being used by criminals to steal from the government. Her LinkedIn profile states she is a former journalist and about to start new position at digital marketer Launch That, Orlando, as legal/medical writer for web. Launch That's Senior Marketing Director is Ronnie Zelek who has also been associated with Annuity.org

What Elaine Silvestrini might have found if she actually did some relevant research

On May 1, 2009 the IRS issued Private Letter Ruling 200918001 to Symetra, in response to a request for a ruling from Symetra as to whether payments it will make to Claimant pursuant to a structured settlement factoring transaction described in § 5891(b)(1) of the Internal Revenue Code are subject to the information reporting requirements of § 6041. It's a valuable bread crumb for journalists that aren't lazy. See my post of May 7, 2009 here

Who Benefits from Annuity.org's useless information?

The only beneficiary of any of the useless information produced by Annuity.org is CBC Settlement Funding of Conshohocken, PA and sponsor of misinformation overs several lead generation verticals.  CBC Settlement Funding, also a sponsor and sole beneficiary of some of the most predatory advertising in the structured settlement secondary market,  is owned by CBC Holdings LLC, a Delaware company. The 8-K lists 600 Partners LLC as the Sole Member and Steven W. Pasko as the managing member of the Sole Member. Steven W. Pasko is a Wharton MBA who is the CEO of Sutton Park Capital.  Pasko didn't get to be an Wharton MBA by being mediocre,  Why Steve Pasko tolerates the mediocrity on display every day at Annuity.org is a question that begs an answer.  Pasko ceased being CEO of SuttonPark Capital in May 2024 

See

777 managing partners resign amid financial peril (msn.com)  

Lawsuit Claims 777 Partners "Operating Giant Shell Game At Best and Outright Ponzi At Worst" - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com)

Last updated August 17, 2024

 

 

Understanding Structured Settlement Transfers-One Court's View

by John Darer CLU ChFC CSSC

New York State Law Reporting Bureau  has the Court's opinion In the Matter of the Petition of Settlement Funding of New York, LLC, for Approval of Transfer of Structured Settlement Payment Rights of John E. Platt. 2003 NYSlipOp 23970 posted on its web site.

This is an excellent piece to help understand the procedures that this particular court in Lewis County, New York State went through to evaluate the merits of the structured settlement recipient's petition to sell his structured settlement payment rights. It also is helpful to know the extent of the discounts that the person selling his structured settlement payment rights is subject to.  If you review the opinion you will see that the discount rate used to reduce to present value seems reasonably fair but then the effective discount rate is a shade under 20% compounded monthly! Mr. Platt consented to this.

It would be helpful to see more of these opinions published in other jurisdictions.