To Purchase Your Payments, a Buyer of Structured Settlements May Need To File Information About Your Prior Sales or Transfer Attempts

In reviewing an application of a buyer of structured settlements for a payment rights transfer, the court may look for information on more than just the current transfer petition.

The court may want to review the "totality of circumstances" related to the transfer application, which may include the "history" of previous structured settlement applications as well.

In states where it is required to submit information about previous transfer petitions, this may include, depending on the specific laws of the state, previous buyout transactions by the transferee, i.e. the buyer of structured settlements, transfers by the payee to the same or to other buyers, as well as attempted transfers that did not go through, whether as a result of the court's denial of the transfer or because the application was dismissed.

Provisions in state laws about the submission of prior transfer applications may be as short as just a small mention, or more elaborate clauses describing the required disclosure in more detail.

NY's short and simple provision

For example, the law for selling structured settlement payments in New York includes just a very small and general provision on notifications of applications of the past, as follows (section 3-1705 d(iv)):

"a statement setting forth whether there have been any previous transfers or applications for transfer of the structured settlement payment rights and giving details of all such transfers or applications for transfers."

Note, the provision doesn't specify whether the applications were approved or denied, whether they have been filed for the same payee and by the same transferee or by a different buyer of structured settlements, nor does it explicitly indicate what applications should be included based on how long before the current petition hey have been filed.

What information a buyer of structured settlements may need to provide regarding prior transfers

According to your state's Structured Settlement Protection Act, all or some of the following disclosures may be required:

• Whether the seller and buyer of structured settlements have engaged in a previous settlement payments transactions that was approved, denied, dismissed, or withdrawn; how long ago; the number and amounts of the payments that were involved
• Whether the payee has sold or attempted to sell payments at a previous time to a different buyer; whether such applications were approved, declined, dismissed, or withdrawn; how long ago, how many payments and in what amounts
• Whether the buyer of structured settlements has purchased or attempted to purchase in the past structured settlement payments from different sellers; when and where

The law may require that the buyer of structured settlements inquires on such information and submits the information to the best of his knowledge to the court along with available documents, such as copies of petitions, transaction documents, or court orders.

In addition, the court may be mandated to inquire on the seller's reason in pursuing a sale of payments in the past, and whether the money paid to the seller was indeed used for the alleged purpose.

All these requirements may be needed to aid in the assessment of the payee's "best interest" in the current transfer pleading.

Considerations based on past proposals and transfers

As an example, the following may be among the supporting reasons for a judge to decline a transfer application:

• The payee has sold a considerable number or amount of payments just 5 months ago (just as a possible example)
• The payee had provided an alleged reason and purpose at a previous transfer for selling and using the money but has not used it for the stated need
• The payee used up a large amount money of a previous payments sale transaction or from more than one transfer quickly and was left with little of his future payments and without sufficient resources to support himself and his dependents
• Reasons related to rejections of previous payment transfer applications of the payee by the courts, or dismissal of previous petitions

More general laws in states such as Minnesota and California

As mentioned, there are differences in the details of this provision between the states requiring it.

One such difference is in the time when the previous transfer or application for approval have taken place.

Some states require, for example, that transfers or petitions that have occurred in the past year or the past five years, or another time-frame, need to be notified, while other states have more general provisions without mentioning a given time of past applications and transactions that the court should be notified about.

Minnesota, just to give one example, has a short clause for reporting previous applications and transactions - the provision is relatively new and has been added in 2014 - without referencing a time.

California's provision goes into more depth but is also not referring to any dates of past applications.

More detailed provisions of states such as Florida, Ohio, Virginia and Oregon 

In the Florida's Statues (section 625.999296 (4) d.5, as amended), on the other hand, the following is instructed (as amended) as part of a summary that needs to be included with an application for the approval of a structured settlement transfer (emphasis added by us):

Virginia's as well as the amended Ohio code have the same requirement for reporting of past applications and proposals of structured settlement transfers.

Oregon's SSPA, that was revised in January 2014, requires slightly different notifications on prior transfers:

a summary of prior transfers by the payee to the transferree within the five years preceding the date of the pending transfer agreement; prior transfers by the payee to a person other than the transferee within the five years preceding the current pending agreement date; any attempted prior transfer by the payee to the transferee or to another person within the year preceding the date of the pending agreement, including attempted transfers that were denied, dismissed or withdrawn prior to a decision.

Prepare your information and documents to speed up the process

As you can see, it depends much on the state where the petition is to be filed (which may be your own county of residence).

It is worthwhile, in order to speed up the process (you do need the cash as soon as possible, right?), to ask the buyer of structured settlements you're going to deal with, or your attorney, about the specific details of this law in your own state.

Gather the facts and supported documents so that you are prepared to provide the necessary information about any prior accomplished structured settlement transfers, proposals and attempts of transfers by you to the buyer or to any other person.

• To sum it up, make a list of the following that you may need to provide:
• The person you engaged with in a proposed or actual transfer
• Amounts of the payments and money of those transfers
• The discounting rate that was proposed or applied (the buyer of structured settlements should have disclosed this to you in writing, so you may need to look it up in the documents or consult the buyer on this
• The actual sum of money that you have received; what you have done with that money.

Still left with questions?

If all these sounds too complicated or confusing to you, don't worry. Give us a call, and we'll explain it to you.

Want to sell your structured settlement and need help to speed up the work? We're just a phone call away.

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More links:

Court approval process for structured settlement payment transfers

1. Sell Structured Settlement
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2. How To Sell
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3. Previous Transfers