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.
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.
According to your state's Structured Settlement Protection Act, all or some of the following disclosures may be required:
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.
As an example, the following may be among the supporting reasons for a judge to decline a transfer application:
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.
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):
a. Any transfers by the payee to the transferee ..., within the 4 years preceding the date of the transfer agreement.
b. Any transfers within the 3 years preceding the date of the transfer agreement made by the payee to any person or entity other than the transferee..., to the extent such transfers were disclosed to the transferee by the payee in writing or are otherwise actually known by the transferee.
c. Any proposed transfers by the payee to the transferee..., for which an application was denied within the 2 years preceding the date of the transfer agreement.
d. Any proposed transfers by the payee to any person or entity other than the transferee..., to the extent such proposed transfers were disclosed to the transferee by the payee in writing or are otherwise actually known by the transferee, for which applications were denied within the year preceding the date of the transfer agreement.
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.
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.
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.
Call Now: 1-800-355-5657
Trust the experts. We are a real insurance company!
More links:
Court approval process for structured settlement payment transfers
TRUST THE EXPERT...
CASH OUT STRUCTURED SETTLEMENT PAYMENTS
We are a REAL insurance agency you can trust!