Today, JG Wentworth announced that three of its non-operating parent holding company level affiliates – JGW Holdco, LLC, J.G. Wentworth LLC, and J.G. Wentworth, Inc., — have filed a voluntary reorganization plan under Chapter 11 of the U. S. Bankruptcy Code in the U. S. Bankruptcy Court for the District of Delaware.
Settlement Quotes has received several inquiries regarding structured settlement factoring companies delaying their obligation to pay annuitants.
Here are a few of the blog comments that Settlement Quotes has received in the past few months:
Stone Street Capital, a structured settlement factoring company located out of Bethesda Maryland recently created a blog to “facilitate open communication.” There has been much controversy over Stone Street’s advertising practices of late and this author hopes that Stone Street would be willing to communicate to both the primary and secondary markets on why they continue to use such terms as “cash now” in their advertising.
Mike Green, an attorney based out of Philadelphia who represents several structured settlement factoring companies published an informative article on the Settlement Capital blog late last week. There are a couple of points that were mentioned in the article that I would like to discuss.
In the article published by Mr. Green, he explained the concept of an annuity’s present value. I would like to provide a few examples on the concept.
Settlement Quotes strives to make our blog entries current. Yesterday this author published an article “JG Wentworth Loses Satisfactory Rating From the BBB,” in the article this author discusses how JG Wentworth has had their satisfactory rating removed from their Better Business Bureau profile.
Within a period of 12 hours, JG Wentworth’s rating went from unsatisfactory to satisfactory. J.G Wentworth’s BBB profile was under review for a three week period throughout September. Once their profile came back online on October 3rd, 2008 their profile was stripped of the satisfactory rating.
As of October 5th, 2008, JG Wentworth has officially been stripped of it’s satisfactory rating from the Better Business Bureau.
“To have a “satisfactory BBB Rating” with BBB, a business must be in business for at least 12 months, properly and promptly address matters referred to it by BBB, and be free from an unusual volume or pattern of complaints and law enforcement action involving its marketplace conduct. In addition, BBB must have a clear understanding of the business and no concerns about its industry.”
Last week the NASP met for their annual meeting and a few individuals have blogged about the event. This author would like to comment on a few points brought up by other authors.
Insurance Companies Purchasing Their Own Product
There are currently two issuers who factor structured settlements- Allstate and Clearscape Funding (Symetra). The problem with these two companies is that they have high discount rates starting at 10- 12%, they take forever to complete a transaction, and it is a conflict of interest to purchase the settlement on the back end and make another profit off of the annuitant.
An annuitant can receive a better rate anywhere.
Reasons an Annuitant Sells the Rights to Their Payments
Over the past few months Settlement Quotes has been keeping track of the reasons our clients have sold the rights to their payments. With the consent of these individuals we will be publishing the list to show how 99% of these individuals had no choice but to sell their payment rights because of their particular financial circumstances.
The following two questions were asked by John Darer of Structured Settlements 4 Real:
The answer to this is quite simple. An annuitant cannot forgo the court approval process in a structured settlement factoring transaction. Here is why:
The lump sum you receive from the sale of your structured settlement payments will have the same tax treatment as your structured settlement annuity. In other words if your structured settlement payments were tax free then the lump sum you would receive from the sale would be tax free as well.
Most structured settlement annuities qualify for tax free treatment under section 130 of the Internal Revenue Code. The U.S Governement has taken several steps to protect tort victims and other parties from unfair taxes that resulted from personal injury settlements.
Thousands of annuitants sell the rights to their annuity payments every year, but what can each of these individuals due to secure their financial future? The simple answer is to plan ahead for both the certain and uncertain events that will happen.
Annuitants sell the rights to their payments for a multitude of reasons, most caused by a financial situation such as debt. Once a lump sum of money is received for selling their structured settlement, the last thing these individuals need is to be placed in the same exact position a few years later. If this situation were to occur again, the annuitant will either have to sell more payments or may have to file bankruptcy.