It’s your money and they want it now!

About your annuity or structured settlement
Nominate a Top Woman in Business. Click here. Nominate an NEPA business professional under 40. Click here.

For the Record

Sign up now for full access to Local Business Deeds, Bankruptcies, New Incorporated and Local Stock Activity from the Northeast Pennsylvania Business Journal. (read more)

20 Under 40: JenniferDessoye

Photo: N/A, License: N/A, Created: 2016:11:17 11:10:02

Dr. Jennifer Dessoye is assistant professor of occupational therapy at Misericordia University and owner of Bright Beginnings Early Learning Academy (BBELA). Discontent with the early education curriculum and understanding of human development and neurolo (read more)

20 Under 40: Amy Hlavaty Belcher

Photo: N/A, License: N/A, Created: 2016:11:09 13:55:46

Amy Hlavaty Belcher, 39, owner and artistic director of Abrabesque Academy of Dancing, believes that for those who have been given much, much is expected. “I just try hard to do my best,” she said. I have been blessed with many opportunities and many gift (read more)

20 Under 40: Christopher Hetro

Photo: N/A, License: N/A, Created: 2016:11:14 11:21:35

Chris Hetro, 33, works hard and plays hard. “A strong work ethic is important, but finding balance outside of work is important because life is too short and you need to enjoy it,” he explained. As an electrical engineer and project manager at Borton-Laws (read more)

20 Under 40: C. David Pedri

Photo: N/A, License: N/A, Created: 2016:11:14 15:19:17

For attorney C. David Pedri, 37, it’s all about a combination of qualities that contribute to success. “My philosophy is simple: be open and honest, treat people the way you would want to be treated, with respect, and work hard to attain your dreams. The (read more)

20 Under 40: Ed Frable

Photo: N/A, License: N/A, Created: 2016:11:09 11:13:04

Ed Frable, 28, believes “if I work hard and stick to my word, good things will happen. My crew will not be deterred. We will re-evaluate our game plan and not give up until the job is complete,” explained Frable, the owner/operator of Ed Frable Constructi (read more)

20 Under 40: William H. Bender II

Photo: N/A, License: N/A, Created: 2016:11:16 13:11:08

William H. Bender II, CFP, CIMA, CRPC, loves what he does. “I’m lucky. I come to work every day excited to help the people and institutions we work with,” explained Bender, 34, first vice president at Bender Wealth Management Group, Merrill Lynch. The fam (read more)

20 Under 40: Angelo Venditti

Photo: N/A, License: N/A, Created: 2016:11:14 16:09:11

Angelo Venditti, 38, heard a call to the helping professions early on. Geisinger Northeast’s chief nursing officer answer was to volunteer for his local fire company. After high school, he became a paramedic, then enrolled in nursing school. Three years a (read more)

20 Under 40: Donald Mammano

Photo: N/A, License: N/A, Created: 2016:11:17 12:38:37

At 20, Donald Mammano began his own company, while attending the University of Scranton. Mammano, now 33, and president of DFM Properties, recalls, as a youngster, holding a flashlight while his father fixed the kitchen sink. “From that point on I was fas (read more)

20 Under 40: William J. Fennie III

Photo: N/A, License: N/A, Created: 2016:11:15 09:50:19

William J. Fennie III, 27, is always knocking on the proverbial door, because he knows one day, one will open. As an investment specialist with Integrated Capital Management (iCM) he cannot take “no” for an answer. “I make cold calls every day to invite f (read more)

20 Under 40: Marcus Magyar

Photo: N/A, License: N/A, Created: 2016:11:14 13:25:24

As an advisor at CAPTRUST Financial Advisors, Marcus N. Magyar, CFP, 30, provides comprehensive wealth management and investment portfolio services to business owners, executives, families and high-net worth individuals. His multi-disciplinary team of pro (read more)

20 Under 40: Heather Davis

Photo: N/A, License: N/A, Created: 2016:11:10 13:34:44

Heather M. Davis, 33, director of marketing and communication, is responsible for creating, overseeing and implementing a strategic marketing and comprehensive communications plan for The Commonwealth Medical College (TCMC). She is also responsible for pr (read more)

20 Under 40: Alexandria Duffney

Photo: N/A, License: N/A, Created: 2016:11:14 14:24:50

Alexandria Duffney, 30, is competitive by nature and loves a good challenge. These qualities have led her to her position as associate director of graduate admission at Wilkes University. Here she works with prospective students interested in enrolling in (read more)

20 Under 40: John Culkin

Photo: N/A, License: N/A, Created: 2016:11:07 17:18:26

John Culkin’s tenets inform: “Less haste equal more speed; the same boiling water that softens the potato hardens the egg, it is all about what you are made of, not the circumstances surrounding you; and don’t ask someone to walk a mile in your shoes, bef (read more)

20 Under 40: Conor O'Brien

Photo: N/A, License: N/A, Created: 2016:11:14 17:19:58

“What could be worse than getting to the end of your life and realizing you hadn’t lived it,” mused Conor O’Brien.” As co-founder and executive director of the Scranton Fringe Festival, O’Brien, 25, is responsible for leading the development of the overal (read more)

20 Under 40: Jessica Siegfried

Photo: N/A, License: N/A, Created: 2016:11:10 14:12:08

Jessica Siegfried, 38, is senior designer with BlackOut Design Inc., where she is responsible for all creative design at the full-service agency, from traditional branding and print to collateral and front end web design. “I’ve always had an interest in t (read more)

20 Under 40: David Johns

Photo: N/A, License: N/A, Created: 2016:11:08 10:15:37

David Johns’ career path has been shaped by his diverse experiences. As director of structural engineering at Greenman-Pedersen Inc., Moosic, Johns, 39, ensures that his engineering and consultant teams provide clients with their best effort. “We complete (read more)

20 Under 40: Robyn Jones

Photo: N/A, License: N/A, Created: 2016:11:14 12:41:32

Robyn Jones, 38, president of ReferLocal LLC, has learned just as many lessons from her business successes as she’s had from her failures — and she believes it’s important to share that knowledge with her employees. After graduating from American Universi (read more)

20 Under 40: Nisha Arora

Photo: N/A, License: N/A, Created: 2016:11:14 10:02:06

Nisha Arora, 36, tries to be the best version of herself every day. As general counsel for ERA One Source Realty Inc., she realized she cannot control other’s behavior so “I try to focus on myself and how I can be better,” she explained. Arora’s responsib (read more)

20 Under 40: Justin Sandy

Photo: N/A, License: N/A, Created: 2016:11:10 14:59:27

Starting at a young age in Hazleton, Justin C. Sandy, 33, found a passion for running. He became a member then a coach for Misericordia University’s cross country and track and field programs. “It was at Misericordia that I also garnered the profound sati (read more)

20 Under 40: Dr. Ariane Conaboy

Photo: N/A, License: N/A, Created: 2016:11:16 09:38:07

As a doctor of internal medicine at Physicians Health Alliance, Dr. Ariane M. Conaboy, 34, realizes the importance of human life and how fragile it can be at times. Conaboy graduated from Scranton Prep and the University of Scranton with a double major in (read more)

Find us on Facebook!

Photo: N/A, License: N/A

"Like" us on Facebook for all of the latest news! (read more)

Follow us on Twitter!

Photo: N/A, License: N/A

Follow us for constant updates! (read more)

Article Tools

Font size
+
Share This
EmailFacebookTwitter

Photo: Craig White/KRT, License: N/A

300 dpi 0.5 col x 1 in / 22x25 mm / 75x86 pixels Craig White color illustration of a gavel icon. Bradenton Herald 2006

KEYWORDS: lawsuit icon gavel judge judicial justice ruling lawyer claims sue court legislation krtlaw law krtnational national krtworld world krtbusiness business krtintlbusiness krtnamer north america krtusbusiness u.s. us united states krt ley pleito litigio abogado negocios illustration ilustracion grabado br contributor coddington white 2006 krt2006

Photo: N/A, License: N/A, Created: 2013:01:17 10:21:09

J.C. Munley

We all have seen the hard-hitting television commercials decrying: “It’s your money and you want it now!” These get-your-cash now ads, while seemingly helpful to those experiencing financial hardship, prey on individuals who have money in structured settlements.

 

They may seem too good to be true — and in most instances they are. What these ads don’t disclose is that the realized value to you now of this money owed to you in the future will be less than the amounts in the settlement, sometimes up to 40 percent less.

The ads are designed and created by companies that are in the business of purchasing structured settlements, otherwise known as “factoring companies,” and it is their goal to entice structured settlements holders to sell their settlements in exchange for a lump sum payment at the “present value” of the structure.

Unfortunately, many people who own these structured settlements don’t understand the economic downside of selling their structures and don’t realize the value of what they are giving up in exchange for quick cash.

Companies that purchase structured settlements lure individuals in with the notion that they will help free them from the hold that has been placed over their money and, in order to make money on the purchase, they often pay the owner far less than even the present value of the structure.

Structured settlements are most commonly used in conjunction with personal-injury lawsuit settlements and by their nature are intended to protect those who could fall victim to scams and designing influences.

Structures are carefully created with the specific input of all parties. How much is placed into the structure, how long the structure will last and what the projected payouts will be are all detailed to the individual before a structure agreement is signed. It is a way for accident victims to receive guaranteed, tax-free income tailored to their future needs.

Once a structure agreement is entered into, a court must approve the creation of the structure before any money is transferred into the structure. Once created, it takes an order of the same court to change any of the terms of the structure including its sale.

Structure figures are based on the accumulation of interest over time and therefore the payout amount does not exist until the maturity date.

In 1982, Congress amended the tax law to allow the interest gained on structured settlements to be tax-exempt — therefore, when the proceeds of a settlement are put directly into a structured settlement, any accrued interest on that money is not subject to income tax

Factoring companies that purchase an individual’s structured settlement will place a value, which is called a “discount rate” on the total amount they are purchasing. This is the number that determines how much an individual will receive for his/her annuity. The higher the number, the lower the payout. With the abundance of structured settlements in place, an entire industry has grown up around the purchase of those settlements from beneficiaries.

Competition for business is stiff, and often consumers are misled by representatives of factoring companies trying to purchase their settlement. They are told they have lawyers who know how to get this approved quickly or have ways of making certain legal hurdles disappear. Despite their claims, no one factoring company has a better chance of getting court approval than any other. They simply employ some deceptive marketing techniques to make the consumer believe they are the only company that can help them.

The truth is that, by law, the sale of your structured settlement has to be approved by the court and the court will have certain criteria that must be met for an approval to be issued. The factoring company buying the structured settlement is required to disclose to the seller the difference between the value of the settlement payments versus the value if sold and also a summary of the terms of the transaction. The judge must find that the transfer will serve in the best interest of the payee and/or any dependents and is necessary to prevent undue financial hardship. All “interested parties” must be identified, giving them an opportunity to oppose, support or respond to the transfer, and finally, the transfer must not contravene any applicable federal or state statute, court order, judgment or decree.

In the end, anyone who holds a structured settlement and considers selling it must understand that they are going to lose the vast majority of the final payout of their structure. The commercials should really say “It’s your money and WE want it now.”

Atty. James Christopher Munley is a partner with Munley Law. Call (570) 346-7401 or visit www.Munley.com. The ideas and opinions expressed are the author’s and not necessarily those of the Business Journal.

We welcome user discussion on our site, under the following guidelines:

To comment you must first create a profile and sign-in with a verified DISQUS account or social network ID. Sign up here.

Comments in violation of the rules will be denied, and repeat violators will be banned. Please help police the community by flagging offensive comments for our moderators to review. By posting a comment, you agree to our full terms and conditions. Click here to read terms and conditions.