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.
