In most cases, when seeking a structured settlement lump sum in exchange for selling future payments, judges are inclined to approve the transfer being convinced that the sale is in the best interest of the seller.
When an average adult holder of a structured settlement decides to sell it for a lump sum, there's usually a reasonable cause to it.
The reason oftentimes is because of a need of a sum of money to afford an important purchase, expenditure, or investment.
This may be the need to save your house from foreclosure, buy a home, a car, fund education, and so on, all which may be thought of as legitimate and reasonable motives to cash out future payments for a structured settlement lump sum.
May All Be Legitimate Reasons To Sell Structured Settlements
As long as you are really in the need of the money, there should not be a problem to get the approval of a judge. After all, it's your money, and the whole point of requiring court approval is to protect you, your dependents and your interest.
Indeed, there are critics of the whole idea of being paternalistic to grown up people who have made their own decision to sell structured settlement payments. However, the strict regulations and the need for court approval are really in place to protect vulnerable structured settlement holders from predator companies.
Since the sale of a structured settlement is in your interest, there should be nothing holding you back from accomplishing it, although it is many time suggested that you obtain third-party financial advice, and in some states it is mandatory (although some states requiring it to allow a waiver if you request it).
Knowing this, you can confidently show up for the court hearing and be pretty sure that your case will be approved (you should, however, always be respectful to the judge, needless to say).
The judge will want to know that you really understand what is being done and have made a conscious decision to do so.
So be prepared to answer questions such as:
Likewise, the judge may inquire about the discount rate (the mechanism in place to calculate how much less you get compared to the future payments of the structured settlement) and whether additional fees are charged (attorneys, etc) or included in the price that you are being paid by the factoring company for selling your payments for a structured settlement lump sum.
If you have done your due diligence, thinking and decision, and you are indeed offered a fair deal, and convinced that the sale is in your interest, don't be shy of showing up in court. It will do you no harm. You are likely to get the judge's approval, and usually it should be a quick process.
An exception in some, rather rare instances may be when there's an anti-assignment restriction imposed on the structured settlement by the original insurance issuance company at the court thinks there's a reason to hold up the anti-assignment provision, forbidding the structured settlement transfer.
As said, this is not something that happens frequently, especially in light of the SSPA that protects the rights of claimants.
Be confident in explaining to the judge your choice and answering the questions. There's should be on your part:
You are doing the right thing and so there’s nothing wrong whatsoever in cashing out your payments for a structured settlement lump sum. The cash out may be a wise financial decision on your behalf.