Case Study: Sarah Parker

Sarah, a mother of five, can still recall the horrifying moment surrounding the phone call. Two of her boys had just started arguing, spaghetti was cooking, and in the distance the phone ringing. When she answered the phone she knew instantly that something was very wrong from the man's tone of voice on the other line. It was the Sheriff; Sarah’s husband had been in a car accident and had passed away.

Sarah found herself unexpectedly widowed with little savings and a lot of bills.

As a stay at home mom, Sarah was quickly overwhelmed. While her husband was alive, they had spoken about the need for life insurance, but they had never purchased any. Sarah found herself unexpectedly widowed with little savings and a lot of bills. The insurance company representing the driver, whose negligence killed her husband, seemed invincible and unmerciful. After a frustrating amount of time, she called an attorney. Two years of debt accumulated before the relieving settlement occurred, but Sarah wanted to make sure she was protected for the rest of her life. She used some of the settlement proceeds to pay off her debts and agreed to a structured settlement that included a check for $3,800 that would arrive at her house monthly for the rest of her life.

When Sarah’s youngest son turned five, Sarah was able to go to work. She found a job that was both interesting to her and flexible enough to give her family the attention they needed. Her job added another $2,500 per month to the family budget, which helped her feel that her financial life was getting back on track.

Shortly after getting her life back on track, Sarah received another phone call that shattered her life again. Her oldest son, Kevin, had been hospitalized after being severely attacked by a gang at his school. She knew that the safety at her neighborhood school had deteriorated, but she was shocked to learn the extent. She listened in disbelief as her other boys described an emergent gang at the school that had targeted her two oldest boys. When she met with the principal, she was angry to discover that Kevin was being suspended for “fighting.” Conversations with school district officials further angered and frightened her because she learned that she had no options but to transfer her older children to a safer school. She felt no other choice but to enroll the older boys in a private school until she could find a solution. Kevin’s recovery and rehabilitation was slow. Fortunately, most of his medical bills were covered by insurance, but the deductible and co-pays were exceeding her ability to meet them from a budget already stretched by private school tuition.

The stress was taking a toll on Sarah and she knew her plan was unsustainable. She could not live in a place where her boys were not safe. She searched for a different home in a better part of town, but nothing came within a reasonable price range. Sarah’s credit worthiness was still negatively affected by the two years of poverty and debt she had endured before her settlement. Everyone had been paid, but she had been late on several occasions. She finally found a neighborhood with several homes for sale in a price range that was just barely within her budget. The homes were in a fantastic public school district and still close enough for her to keep her current job. However, due to a tight mortgage market and her bad credit rating, the equity in her home was insufficient to cover the down payment and closing costs. Her mortgage broker said that she would need an additional $50,000 in cash at closing.

She almost missed it. Sarah was walking through the living room where some of her boys were watching TV, when a commercial caught her attention. She heard something about selling a structure settlement, she wrote down the number and called immediately. Sarah was astonished at the low amount that the factoring company offered for her future payments. They never mentioned that she could sell some, but not all, of her future payments. She said she needed to think about it, but the voice on the phone told her that the price he was offering would probably go down if she didn’t commit soon.

Every day brought a phone call urging her to act and she didn't have time to think through the issues or discuss it with her advisors.

Sarah called the attorney who had represented her in her husband’s case to ask for advice. He immediately hated the idea and suggested that she call a structured settlement broker with whom he worked. The structured settlement broker also seemed to immediately not like the idea of selling her future payments, but after he heard more about the circumstances, he suggested that she call Bentzen Financial. Sarah spoke with Rhonda Bentzen about her situation and her offer. She came up with an idea to sell only a fraction of her payments to raise the money she would need for the down payment. The future payments would be missed, but Rhonda and Sarah identified some of the payments that would have the least effect on Sarah’s goals. The purchase price was much higher (50% higher, in fact) for the identified payments than the amount offered by the company Sarah had first called, and Sarah never felt pressured to act quickly.

After two months of exchanging paperwork and a brief court appearance, Sarah received her money a week ahead of her scheduled closing. The family was able to move into a more suitable home that provided the comfort and safety that Sarah wanted for her and her family. Today, she continues to receive periodic payments for $3,800 per month while her kids live at home and she feels more at ease with her life.