News and Tips on structured settlement transfers.

Cash

January, 2013


30
Jan 13

Can a Structured Settlement Transfer be Blocked by the Court?

Many people rightfully think that the decision of how to best use their resources, like money, is theirs to make. This is especially true of annuities and structured settlements, although that might not actually be true. Many states have laws in place dictating how structured settlements are dealt with, especially transfers or sales. Can a court really block the transfer of a structured settlement? The most honest reply to that question is yes, the court can deny the transfer of a settlement, but there’s a little more to it than that.

A Little Investigating

You have to know about the history of the structured settlement brokerage industry to really know what’s going on. The predatory nature of some companies has caused many states and consumer advocates to hold a low opinion of structured settlement transfers. Preying on the desperate and needy, these companies convince them that the best option for their financial situation is selling their structured settlements.

Most states, however, now have laws on the books to protect consumers from these types of predatory companies. One of the immediate benefits of this is that all transfers or sales must go before a judge, who will determine if the transfer is in the payee’s best interests. In many cases, the judge denies the transfer, not allowing the sale to take place.

The Criteria for Denying a Transfer

The reasons for denying the sale or transfer of a structured settlement are many and varied. One of the most common reasons is that allowing the sale or transfer is “not in the payee’s best interests”. This can mean virtually anything, although there does seem to be mitigating factors. For example, there’s a good chance that the court will reject the transfer if the funding firm recommends that the payee seek legal counsel before entering into a transfer arrangement. The proposal will then be rejected if the court does not find proof of a real financial need on behalf of the payee.

Additionally, if the transfer is not deemed “fair and reasonable” the court may reject it. For example, chances are very good that they will not approve of the proposal if the funding firm offers a payout of only 50% of the total payments for the life of the settlement.

It is easy to see that there are many factors that could lead a court to reject the transfer of a structured settlement. Showing a real financial need, and working with a firm that’s offering fair terms, is your best defense against a court denying your sale.

If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.


23
Jan 13

Annuities and Structured Settlements: What’s the Difference?

Annuities and structured settlements have many similarities, and you might even make the mistake of thinking they are the same thing. Sure, they both pay regular payments to the people they are owed to over a specified time period, but the way state and federal laws see these two types of payments confirms that they are indeed different things. Let’s examine annuities and structured settlements and see exactly what the difference is.

Structured Settlements: An Examination

Basically, structured settlements are the result of winning a liability or personal injury lawsuit, and payments are set up to be made over an agreed upon period of time until the full amount due has been paid. These payments are made from a lump sum amount that the defendant, who has either settled or been found guilty, has set aside to satisfy the lawsuit. The term for this is “deferred payments”.

Annuities: A Closer Look

The financial tools investment firms, insurance companies, and the like use for administering payments are called “annuities”. Annuities are an investment in which the investor earns returns, in addition to the original investment amount, and which can have many beneficiaries. There are many different types and styles of annuities, and even lottery winnings can fall into this category if the winner chooses payments instead of a lump sum payment of their winnings.

Important Information

Once you get down to carefully comparing the two, the differences between structured settlement payments and annuities can be pretty glaring. As a beneficiary of a structured settlement or annuity payment, how do these differences affect you and your financial future?

Where you live, and how state and federal law apply to your individual transfer, will help determine how they affect you. The law will often allow the sale of structured settlement payments, but it can be different in the case of annuities. The process of selling an annuity can be difficult and confusing, which is why the expert advice of a settlement broker can be essential for helping you meet your transfer goals.

Working with a competent and skilled broker may be the best decision for someone who is considering selling their annuity. A broker with the reputation for competent, high-quality customer service and is a registered member of the Better Business Bureau can provide their clients with all the help they need to navigate the murky waters of transferring an annuity or structured settlement payment.

If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.