STRUCTURED SETTLEMENT CASH NOW GUIDE

Do you have a structured settlement? The structured settlement cash now guide can help you get a cash payment quote. Find out how to - Cash In a Structured Settlement.

> Free Consultation - Get structured settlement help regarding selling your annuity future payments. HAVE A Structured Settlement Purchaser Factoring Representative Contact YOU, this site will forward your questions & requests to an established finance representative/company.

---

Discount Rate

In the beginning, the factoring industry had some relatively high discount rates due to heavy expenses caused by costly litigation battles and limited access to traditional investors. However, once state and federal legislation was enacted, the industry’s interest rates decreased dramatically. There is much confusion with the terminology “discount rate” because the term is used in different ways. The discount rate referred to in a factoring transaction is similar to an interest rate associated with home loans, credit cards and car loans where the interest rate is applied to the payment stream itself. In a factoring transaction, the factoring company knows the payment stream they are going to purchase and applies an interest rate to the payment stream itself and solves for the funding amount, as though it was a loan.

Discount rates from factoring companies to consumers can range anywhere between under 8% up to over 18% but usually average somewhere in the middle (link to a discount rate calculator can be found here). Factoring discount rates can be a bit higher when compared to home loan interest rates, due to the fact the factoring transactions are more of a boutique product for investors opposed to the mainstream collateralized mortgage transactions.

Do you have a structured settlement? The structured settlement cash now guide can help you get a cash payment quote. Find out how to - Cash In a Structured Settlement.

> Free Consultation - Get structured settlement help regarding selling your annuity future payments. HAVE A Structured Settlement Purchaser Factoring Representative Contact YOU, this site will forward your questions & requests to an established finance representative/company.

---

The Los Angeles County Board of Supervisors agreed Tuesday to pay a nearly $207,000 settlement to a psychiatric patient who jumped out of a hospital window and suffered permanent brain injury. Ramiro Polanco, 38, sued after he took a three-story plunge from Olive View-UCLA Medical Center on September 17, 2008. The suit alleged that the nursing staff at the Sylmar hospital failed to adequately supervise Polanco, who required constant watch after suffering a schizophrenic episode.

Polanco's attorney, Robert J. McCulloch, said that his client made previous attempts to break the glass window with a chair that day, but nurses assigned to observe him failed to intervene and prevent him from jumping out the window. A county-employed nursing attendant who first saw Polanco attempt to escape wrote down what happened, but didn't note in the shift log whether attempts were made to prevent him from trying again, McCulloch said. Polanco was able to jump out the window later that day while being supervised by a nurse provided by HRN Services, Inc., which is contracted by the county.

Do you have a structured settlement? The structured settlement cash now guide can help you get a cash payment quote. Find out how to - Cash In a Structured Settlement.

> Free Consultation - Get structured settlement help regarding selling your annuity future payments. HAVE A Structured Settlement Purchaser Factoring Representative Contact YOU, this site will forward your questions & requests to an established finance representative/company.

---

The last parts of Section 10139.5 deal with the costs involved in the transfer, and who has to pay those costs. Section (d) to (f) read:

(d) All court costs and filing fees shall be paid by the transferee.

(e) No later than the time of filing the petition for court approval, the transferee shall advise the payee of the payee's right to seek independent counsel and financial advice in connection with the transferee's petition for court approval of the transfer agreement, and shall further advise the payee that if the payee retains counsel, a licensed certified public accountant, or a licensed actuary in connection with a petition for an order approving the transfer agreement, that the transferee shall pay the fees of the payee's counsel, accountant, or actuary, regardless of whether the transfer agreement is approved, and regardless of whether the attorney, accountant, or actuary files any document or appears at the hearing on the application for transfer, in an aggregate amount not to exceed one thousand five hundred dollars ($1,500). The transferee's accountant, counsel, or actuary may not advise the payee.

(f) The court shall retain continuing jurisdiction to interpret and monitor the implementation of the transfer agreement as justice requires.

What this means is that the company buying your structured settlement has to pay all of the court fees involved in the transfer. Section (e) is probably the most important thing to pay attention to, as it states that the company buying your structured settlement must pay (your accountant, attorney, etc.) for your independent professional advice regarding the transfer. It doesn't matter what the conclusion of the professional is; in other words, it doesn't matter if the independent professional advice is "it's fair", or "it's unfair" -- the company trying to buy your structured settlement is the one to pay the independent attorney - not you (the seller). However, this amount can not exceed $1,500.

If you are about to make a financially life-changing decision, it is wise to get the opinion of a detached, independent, and professional opinion.

above is an excerpt from
web site independentprofessionaladvice.com/

Do you have a structured settlement? The structured settlement cash now guide can help you get a cash payment quote. Find out how to - Cash In a Structured Settlement.

> Free Consultation - Get structured settlement help regarding selling your annuity future payments. HAVE A Structured Settlement Purchaser Factoring Representative Contact YOU, this site will forward your questions & requests to an established finance representative/company.

---

Discounted Present Value

The “discounted present value” is a measuring stick for determining what the value of a future payment (i.e., a payment that is due in the year 2057) is today. Hence, the discounted present value of a payment corrects for inflation and the principle that money available today is worth more than money not accessible for 50 years (or some future time). However, the discounted present value is not the same thing as market value (what someone is willing to pay). Basically, a calculation that discounts a future payment based on IRS rates is an artificial number since it has no bearing on the payment’s actual selling price. For example, in Henderson Receivables Origination, it is somewhat confusing for the court to evaluate future payments totaling $63,364,94 based the discounted present value of $50,933.18 because that is not the market value of the payments. In other words, the annuitant couldn’t go out and get $50,933.18 for his future payments because no person or company would be willing to pay that much.


Another term commonly used in factoring transactions is “discounted present value,” which is defined in the NCOIL model transfer act as “the present value of future payments determined by discounting such payments to the present using the most recently published Applicable Federal Rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service.” [18] The IRS discount rate, also known as the Applicable Federal Rate (AFR), is used to determine the charitable deduction for many types of planned gifts, such as charitable remainder trusts and gift annuities. The rate is the annual rate of return that the IRS assumes the gift assets will earn during the gift term.

Do you have a structured settlement? The structured settlement cash now guide can help you get a cash payment quote. Find out how to - Cash In a Structured Settlement.

> Free Consultation - Get structured settlement help regarding selling your annuity future payments. HAVE A Structured Settlement Purchaser Factoring Representative Contact YOU, this site will forward your questions & requests to an established finance representative/company.

---

Federal legislation

In January 2002, Congress accepted Mr. Mikrut’s suggestion and changed tax law to make a statement about sales of structured settlement payments. It decided that the IRS would be able to impose a 40% tax on any difference between the value of the future payments sold and the amount paid to the person who wanted to sell. The sole exception was where the sale was approved by a Court under certain conditions. IRS Code section 5891 became effective in July 2002.

In 2001, Congress passed HR 2884, signed into law by the President in 2002 and effective July 1, 2002, codified at Internal Revenue Code § 5891.[10] Through a punitive excise tax penalty, this has created the de facto regulatory paradigm for the factoring industry. In essence, to avoid the excise tax penalty, IRC 5891 requires that all structured settlement factoring transactions be approved by a state court, in accordance with a qualified state statute. Qualified state statutes must make certain baseline findings, including that the transfer is in the best interest of the seller, taking into account the welfare and support of any dependents. In response, many states enacted statutes regulating structured settlement transfers in accord with this mandate.

Post-2002

Today, all transfers are completed through a court order process. As of November 11, 2008, 46 states(Map). have transfer laws in place regulating the transfer process. Of these, 41 are based in whole or in part on the model state law enacted by NCOIL, the National Conference of Insurance Legislators (or, in cases when the state law predates the model act, they are substantially similar).

Most state transfer laws contain similar provisions, as follows: (1) pre-contract disclosures to be made to the seller concerning the essentials of the transaction; (2) notice to certain interested parties; (3) an admonition to seek professional advice concerning the proposed transfer; and (4) court approval of the transfer, including a finding that it is in the best interest of seller, taking into account the welfare and support of any dependents.