Structured Settlements Guide

When I first heard of viatical settlements, or life insurance settlements, I shuddered at such a dastardly idea. I even put into words my deep feelings. You see I spent many years in the life insurance business and have seen the product work for the betterment of so many. I could not conceive of a pleasant result when one deprives the beneficiaries of what was due them. I guess I had not given the idea much thought, thus my extreme response.

Although I still do not feel it right to deprive beneficiaries of their life insurance proceeds so that an insured can get his or her hands on the proceeds of policies during their lifetime through life insurance settlements with investors, after much study and deep thought I can only conclude that there are situations where this is, not only justified, but is absolutely necessary.

If you bring into the picture the unfortunate person who is HIV positive or has developed full blown AIDS and are desperately doing everything they can just to stay alive with these extremely expensive drugs then you will, like I have, learn to appreciate the need for life insurance settlements.

Some people have no cash value life insurance they can borrow from; no nest egg they can draw on. All these people have is their life insurance policy. They therefore sell their policies to the highest bidder. They get 50% to 60% of the face amount of the policy which they use to pay for treatment and for the drugs they need to keep themselves alive.

Let us not elude ourselves that it is only people with aids who need life insurance settlements. There are certain cancers, heart, liver and kidney conditions that can devastate our lives and put us in a financial quandary. I am sure there are many more illnesses that I have not even thought about. I therefore conclude, because I am now more informed, that life insurance settlements can truly be necessary and that when people take this path it must be with great reluctance and heartbreak.

For more than 40 years Donald has been known for his extensive knowledge of the life insurance business. He has represented some of the largest and best life insurance companies in the United States as well as Canada. His advice is invaluable.

Donald’s website is: http://www.lifeinsurancehub.net

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First, know your foe! By that I mean you must understand who you will be talking to. There are two types of people that creditors will hire to deal with their clients. The first is for customer service, to help handle problems and answer questions for account holders. These folks are nice, kind and patient. That’s why they are hired.

The other type is hired for the collection department. They are hired because they are heartless, don’t care about you in any way and are ruthless in getting the money. Once you fall into a collection account, the creditor doesn’t care if you like then any more… they just want their money back.

So when you call in to negotiate terms, you must be aware that you will be talking to the jerk that wants your money, not the sweet lady that wants to help you.

Now that you are mentally prepared for battle, there are some very simple techniques to employ that will help and protect you.

When you talk to anyone, and I mean anyone, make sure you get their name (full name preferably), their direct line or extension, and any other pertinent information they give you. Write this down! That way if you ever need to do follow up, you can get back to the same person and not start all over from the beginning again. (Trust me; you will thank me for this one!)

When you talk to the collector, let them know that you are calling because you want to make arrangements to settle the account. Do not worry about telling them why, how or what about the account and what is going on in your life They won’t care at all. You have to understand that there are so many people out there that just don’t want to pay their bills and lie about horrible things. The collector has heard all the “stories” and will automatically assume that what you are telling them too. (Again, that’s why they are hired for the job!) So, honestly, don’t waste your time. Keep it business like and calm.

Right off the bat they will want to collect the entire amount right now. Don’t go for that at all. Ask the collector what they will accept for a settlement. (Again, be sure to write this stuff down.) They will either come back stating they cannot offer anything lower, or that they can take something like 10% off. You should already have a goal in mind (a reasonable goal) and should continue on your path towards that goal.. get as close as you feel you can.

If after you have spent some time with the collector and they cannot or will not offer something close to what you are willing to settle for, ask for their boss or supervisor. Do not allow them to tell you the boss is not there. Call centers ALWAYS have a supervisor there if for no other reason to make sure the people are on the phone!

When you talk to the boss, get their info and then negotiate with them. Stay at it until you get a fair settlement offer (Fair for both you and the creditor remember, you most likely do owe them the money!)

Now let’s assume you finally got a decent settlement offer. Before you send them any money, demand an agreement in writing. Have them fax (or mail) the agreement to you before you give them any financial or payment info. Once you have the agreement stating they will settle for a certain amount, make sure that you pay them in such a way that you can prove you have made that payment (personal check, copy of cashier’s check, etc.)

A word of caution here most skilled collection agents will assure you that they will update the credit bureaus for you… no need to wait for an agreement. They may also tell you that the only way to get the settlement offer is to pay right away without the agreement in writing. DO NOT FALL FOR THIS! If you ask for this agreement in writing, they must send it to you. If they won’t them inform them that the agreement is not acceptable and that they will get not one penny from you. (This will make them stop a second and rethink their position as the collector get s paid when they collect!) Do not get angry or blow up. Even though this can be frustrating, the calmer head wins.

Once you have the agreement in writing and have made payment in a way that is traceable, you will now be able to show that you paid according to the agreement, even if the creditor never sends you a “paid in full” statement. (MOST WON’T SEND IT!)
Then all you have to do is send that info to the credit bureaus for an update. You now have all the proof you need to prove that the account is paid, and that the credit bureaus must update it.

Remember to always keep a copy for your records, just in case the creditor still sends the account to collections (which can happen, even if by mistake.)

Once these collections are paid and updated on credit, it will take some time for your scores to rebound… typically 6 months. But once they are settled, you should not really have to worry about them again and your credit should get mush better over the long term.

About the author: Ed Nailor is a webmaster, writer and works in the financial and credit fields. His websites, BestNewCreditCards.com, OrchardBankApproval.com and PlasticPlatinum.com have the most current credit card offers online. Each card has a comprehensive review, details about each offer, and a link to the site for instant online applications. For more information on home mortgages in North and South Carolina, or to contact Ed Nailor directly, visit his website at DropRent.com

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Many victims of personal injuries cannot afford the expenses involved in litigating for an injury settlement, even though they may have a genuine case. There are two kinds of personal injury settlement loans. The first are loans based on a collateral, and the second are non-recourse loans given by injury settlement lawsuit financing companies.

The first kind of personal injury settlement loans are forwarded by credit lending companies on some sort of collateral like property, moveable/immoveable assets or bank balance. The drawback to this method of funding is the high rate of interest, as well as a heavy financial burden on the plaintiff should he lose the personal injury settlement lawsuit.

The second kind of personal injury settlement loan is advanced by financing companies on a non recourse basis. This means that if the plaintiff wins the case, he or she will be able to repay the loan from the compensation amount won. But if the plaintiff loses, then the financing company cannot recover any money that was advanced. During the trial, the finance company bears all costs including medical bills, transportation and living expenses and lawyer’s fee.

The fees for the non recourse funding tend to be high, since the financing firm is taking a risk advancing a loan that will not be returned in case the debtor loses the lawsuit. It is therefore advisable to choose a financing company carefully, and reach an understanding beforehand regarding amount to be paid, method of repayment, etc. The company may request a one time payment after a suit is won, or settle for repayment in installments. The fee structure varies.

Most financing companies hire experts who can predict the outcome of a personal injury settlement lawsuit. An unambiguous case of personal injury will be given a loan on easier terms. However, it is always a good idea to consult with your lawyer before going to any financing company.

Injury Settlements provides detailed information about injury settlements, burn injury settlements, hydrocodone injury settlements and more. Injury Settlements is affiliated with Debt Settlements.

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Author: W. Marcus W Nye

Unknown Binding: 

Company: The Association? 

(1980)

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Need money in a hurry, than selling your structured settlement may not be the answer. It can take anywhere from six weeks to four months to get your money. Why you may ask?

A new safe guard has been put in place called a court order. A judge has to rule on if selling your structured settlement is in your best interest. If you don’t have a court order than a tax equal to 40 percent will have to be paid on the total amount of payments being sold. For example: to pay for medical expenses, to buy a house, pay for an education, a business opportunity or to keep from filing bankruptcy may be considered in your best interest.

When deciding whether to sell your structured settlement or not, you need to consider that your proceeds are put to good use or the court will not approve a court order giving you the money.

It is important to find an a ethical company that buys structured settlements. A company or broker who isn’t familiar with the complex laws and procedures involved in selling payments will only add to the time it takes to get your money. Getting the best price quote doesn’t mean you will get that best price. That is why I say it’s important to find an a ethical company. A lot of games are played like adding different fees when it is time to funding the sale. Buyer beware, or in this case, Seller beware!

Frank ReCouper Sr. is President of FDR Resources and has been in financial services for over 45 years. For more information: http://www.money-now.net/structured_settlement_resources.htm

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Lawsuit Loans which are also known as pre settlement cash advances allow a financially strapped plaintiff to access a portion of their future legal settlement to pay today’s necessary living expenses. Personal Injury and worker compensation lawsuits can take years to resolve and large insurance companies have the financial strength to legally delay the process which can financial ruin an injured claimant who is looking for a fair settlement offer.

Companies like Global Financial (http://www.glofin.com) offer cash advances against all types of Personal Injury & Worker Compensation claims. It works like this: Global Financial will review the merits of an applicant’s legal claim and determine the chance & size of a financial recovery. They then offer the claimant a small percentage of the total value of their claim in return for an assignment of a portion of the potential future proceeds in the claim. If there is no financial recovery from the claim then the funding company receives nothing. This makes lawsuit loans very risky and actually a venture capital investment rather than an actual loan as the names suggests.

The fees charge by lawsuit loan companies can vary dramatically but it is usually best to stick with the larger companies, like Global Financial because they work on larger volumes and lower pricing. Usually a funding company will charge either a monthly fee or a flat fee depending on the risk associate with the claim.

It is my personal opinion that a claimant should ask themselves one question before applying for a cash advance against their pending claim. Will the advance that I receive pay immediate and necessary living expense? If the answer is yes then you should accept a cash advance and continue with your legal claim. If the answer is no then it might be wise to hold off and wait before applying for a lawsuit loan or cash advance against your pending claim. In addition, a lawsuit loan may be a very important tool when the defendant’s insurance carrier decides to make a low ball offer for settlement in the claim. You can then use a lawsuit loan as a financial tool to say no to the low ball offer and have the financial strength to wait for a higher and fairer settlement.

Lawsuit Loans have been trademarked by Global Financial as “Lawsuit Insurance” because they offer insurance like protection to plaintiffs in the event that their claim is unsuccessful. If a plaintiff takes a cash advance against their pending legal claim and their claim is unsuccessful then they get to keep the money that was advanced to them. Thus the cash advance guarantees that their claim will be financially successful either by way of the cash advance or by way of settlement or judgment.

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Author: Ralph V Mastrangelo

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Company: University of Bridgeport Law Center, Division of Continuing Legal Education 

(1984)

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Structured settlements have become a natural part of personal injury and worker’s compensation claims in the United States, according to the National Structured Settlements Trade Association (NSSTA). In 2001, life insurance members of NSSTA wrote more than $6.05 billion of issued annuities as settlement for physical injury claims. This represents a 19 percent increase over 2000.

A structured settlement is the dispersement of money for a legal claim where all or part of the arrangement calls for future periodic payments. The money is paid in regular installmentsannually, semi-annually or quarterlyeither for a fixed period or for the lifetime of the claimant. Depending on the needs of the individual involved, the structure may also include some immediate payment to cover special damages. The payment is usually made through the purchase of an annuity from a Life Insurance Company.

A structured settlement structure can provide long-term financial security to injury victims and their families through a stream of tax-free payments tailored to their needs. Historically, they were first utilized in Canada and the United States during the 1970s as an alternative to lump-sum payments for injured parties. A structured settlement can also be used in situations involving lottery winnings and other substantial funds.

How a Structured Settlement Works
When a plaintiff settles a case for a large sum of money, the defendant, the plaintiff’s attorney, or a financial planner may propose paying the settlement in installments over time rather than in a single lump sum.

A structured settlement is actually a tradeoff. The individuals who were injured and/or their parents or guardians work with their lawyer and an outside broker to determine future medical and living needs. This includes all upcoming operations, therapy, medical devices and other health care needs. Then, an annuity is purchased and held by an independent third party that makes payments to the person who has been injured. Unlike stock dividends or bank interest, these structured settlement payments are completely tax-free. What’s more, the individual’s annuity grows tax-free.

Pros and Cons

As with anything, there’s a positive and negative side to structure settlements. One significant advantage is tax avoidance. When appropriately set up, a structured settlement may significantly reduce the plaintiff’s tax obligations (as a result of the settlement). Another benefit is that a structured settlement can help ensure a plaintiff has the funds to pay for future care or needs. In other words, a structured settlement can help protect a plaintiff from himself.

Let’s face it: Some people have a hard time managing money, or saying no to friends and family wanting to “share the wealth.” Receiving money in installment can make it last longer.

A downside to structure settlements is the built-in structure (no pun intended). Some people may feel restricted by periodic payments. For example, they may want to buy a new home or other expensive item, yet lack the funds to do so. They can’t borrow against future payments under their settlement, so they’re stuck until their next installment payment arrives.
And from an investment perspective, a structured settlement may not make the most sense for everyone. Many standard investments can provide a greater long-term return than the annuities used in structured settlements. So some people may be better off accepting a lump sum settlement and then investing it for themselves.

Here are some other important points to keep in mind about structured settlements: An injured person with long-term special needs may benefit from having periodic lump sums to purchase medical equipment. Minors may benefit from a structured settlement that provides for certain costs when they’re youngsuch as educational expensesinstead of during adulthood.

Special Considerations

- Injured parties should be wary of potential exploitation or hazards related to structured settlements. They should carefully consider:

- High Commissions - Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don’t eat up too much of its principal.

- Inflated Value - Sometimes, the defense will overstate the value of a negotiated structured settlement. As a result, the plaintiff winds up with much less than was agreed upon. Plaintiffs should compare the fees and commissions charged for similar settlement packages by a variety of insurance companies to make sure that they’re getting full value.

- Conflict of Interest - There have been situations where the plaintiff’s attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing he would receive a referral fee. In other cases, the plaintiff’s lawyer has set up a structured settlement on behalf of a client without revealing the annuities are being purchased from his own insurance business. Plaintiffs should know what financial interest their lawyer may have in relation to any financial services being provided or recommended.

- Using Multiple Insurance Companies - It’s advisable to purchase annuities for a structured settlement from several different companies. This offers protection in the event a company that issued annuities for a settlement package goes into bankruptcy and defaults.

Benefits of Selling A Settlement

A structured settlement is specifically designed to meet the needs of the plaintiff at the time it’s created. But what happens if the installment arrangement no longer works for the individual? If you need cash for a large purchase or other expenses, consider selling your structured settlement. Many companies can purchase all or part of your remaining periodic settlement payments for one lump sum. This can boost your cash flow by providing funds you can use immediately to buy a home, pay college tuition, invest in a business or pay off debt.

If you’re considering cashing out your structured settlement, contact your attorney first. Depending on the state you live in, you may have to go to court to get approval for the buyout. About two thirds of states have laws that limit the sale of structured settlements, according to the NSSTA. Tax-free structured settlements are also subject to federal restrictions on their sale to a third party, and some insurance companies won’t assign or transfer annuities to third parties.

When selling your structure settlement, check with multiple companies to make sure that you get the highest payoff. Also, be sure the company buying your settlement is reputable and well-established. And keep in mind that if the deal sounds too good to be true, it probably is.

David Springer is a consultant for Sovereign Funding Group. Sovereign Funding Group is an experienced, reputable company that offers convenient, no-risk services to help you with the selling of your deferred payments and business financing including
structured settlements.

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If you are a personal injury claimant, you may have received structured settlements as a result of an injury or accident. Structured settlements are series of guaranteed payments or annuities that are made over certain duration to help you cover present and future expenses.

Unfortunately, with the soaring prices of commodities and other things, the amount you received from these payments are not enough to cover huge unexpected expenses. In this situation, when you need additional cash, you might consider selling structured settlements, either a portion of it or all of the remaining structured settlement payments.

Selling structured settlements is considered legal in all states. But before you can sell, you should have court approval. You can consult a professional that will help you analyze and determine how many of these payments you should sell based on your needs. Next, you can start applying online and wait for a structured settlement expert to contact you. This person will give you an estimate of the amount that you can receive, if you choose any of these selling options — full amount, part of the payments or percentages.

The advantage of selling structured settlements is that you can receive a lump sum of cash that you can use to start a business, college education or immediate medical expenses. This is the best solution if you are really in need of cash for an immediate expense.

However, the disadvantage is that you may come across shady brokers who might take advantage of the situation. Since you need a broker to help you sell, you might deal with a broker who claims to be a qualified, only to find out later otherwise. Make sure that you deal with one who has years of experience in selling structured settlements.

Selling structured settlements can have benefits and pitfalls. That is why you must first consider if it is important to sacrifice the payments for a lump sum of money. Before you make a decision, see to it that you understand the advantage and disadvantage of such an action, as well as its implications.

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The basic definition of structured settlement is, an allowance given to the beneficiary of a financial award. Normally any structured settlement happens due to an accident or injury. The person gets financial benefits through structured settlements in yearly, quarterly or monthly mode after litigation. At any time the person can sell a part of the remaining payments or all of the structured settlement payments. But to sell the remaining structured settlement payment, a person needs approval from the court.

Under structured settlement people get money periodically. In many circumstances it has been seen that periodic payments fails to meet the requirements of the person. To fulfill the need, the person can sell the remaining payments of the structured settlement and in return get cash.

Sometimes an immediate need for cash arises. The amount may not be big but if you are unable to collect the amount, you can sell part of the remaining periodical structured settlement payments.

Selling the payments of structured settlement is a little complicated. You can always have a session with a financial advisor. The advisor would guide you rightly by calculating and modeling the whole process.

If you make your mind to sell the structured settlement partially or fully, then you can apply online. An expert on structured settlement would contact you and advise you on the details and also let you know how much you would get if you sell the structured settlement payments.

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