Selling a structured settlement is a legal process a judge must approve. If the client chooses to move forward with the sale, their application paperwork will be used to file a claim in their state court. CBC Settlement Funding uses a seasoned legal team to make this process as easy as possible, explaining the court proceedings along the way. If you choose to have an attorney represent you during these proceedings, our lawyers will also happily coordinate with your attorney.
After a judge approves the sale, the buyer will pay the client the agreed amount up front in exchange for receiving their future structured settlement payments. CBC Settlement Funding uses checks or electronic transfer to complete this process. We also offer small cash advances to our clients at the beginning of this process for immediate access to funds.
Settlements increased in popularity when Congress passed the Periodic Payment Settlement act. The legislation encouraged the use of structured settlements in personal injury cases by offering significant tax exemptions for money received in a structured settlement.
Structured settlements are a type of annuity, which means the money is managed through an insurance company. The installments from the annuity issuing insurance company were exempted not only from federal income tax, but state and local income taxes as well.
The national average discount rate is 19.2%. Settlement Quotes provides you with an average discount rate of 9%. This has turned Settlement Quotes into the leading structured settlement marketplace in the industry. We consistently provide our clients with the best quotes. Not only do you receive the best quotes, but we do our best to provide the fastest service in the industry. This usually takes between 6 to 8 weeks to accomplish.
Use the Past to Predict the Future
When you sell annuity payments for cash, you place a tremendous amount of trust in the company you choose. Choosing a structured settlement company carries as much weight as selecting a bank or investment firm. Just as you would educate yourself about the background of those firms, you should also do research on the companies you’re considering. It’s important to know how long the company has been in business. A company with a long and successful history is one you can feel good about. Purchasing structured settlements requires an understanding of all laws and regulations, as well as the ability to resolve the transaction in the most efficient, convenient way for the customer.
A structured settlement is often the result of a personal injury lawsuit in which the plaintiff (the party injured) receives periodic payments as a compensation for the injuries sustained in an accident. This income (usually occurring monthly) comes through what is generally known as an annuity. However, some do not consider a long-term stream of payments as beneficial as compared to a one lump sum payment would be.
I thought we had already done that, but the settlement purchasers are smart people with millions of dollars in potential profits on the table. Also, just like payday lenders, they truly understand their customers and that most of the people who cash in structured settlements are not concerned about the long term.
Which is ironic. The primary reason that structured settlements exist is to make sure that people have money for the long haul. People may have good intentions when they enter into a structured settlement, but like people who cash out a 401k plan or retirement plan early, those intentions may be sidetracked by short-term desires or needs.
In asserting jurisdiction over Access, the CFPB has not asserted that the purchase of structured settlements is a credit transaction or a consumer financial service. Rather, the CFPB focuses on the advances made by Access, alleging that Access is a “covered person” under the CFPA because it “provided advances to consumers that were to be repaid through a deduction from the proceeds of structured-settlement transfers once those transactions were completed. These advances were extensions of credit to consumers, and therefore consumer-financial products or services.”
The principals are alleged to be “covered persons” because their status with Access made them “related persons” under the CFPA. The managing member is alleged to be “legally responsible for the liabilities of Access Funding.”
Structured-settlement recipients are those who opt to receive payments from the settlement of court cases in a series of installments rather than a single, upfront sum. The secondary market for structured settlements provides these recipients, also called payees, with the option to make a settlement transfer. Transfers allow payees to sell payments due in the future in exchange for an immediate payment. This option is beneficial to those experiencing financial stresses, including medical bills, eviction or home foreclosure. It also provides a liquidity option to those who need or want to address an upcoming significant expense, such as financing their own or a family member’s education, pursuing a business venture or relocating for personal or employment reasons.
As with 49 other states, Maryland and Virginia have structured-settlement protection acts (SSPAs), which ensure that proposed settlement payment transfers are approved in a court-review process that mandates high standards of transparency, written direction to seek professional advice and detailed disclosures to payees. The bills in Maryland and Virginia propose three amendments that would further safeguard sellers and aid state courts in reviewing these transactions.
A court in New York will have to make sure that your proposed sale meets certain requirements as set out by New York law. For example, the buyer of structured settlement payments in New York that you are working with must have sent you a disclosure notice and you must have been afforded an opportunity to seek the advice of an independent professional. Other than these requirements, which are pretty easy to meet, the harder part is convincing the court that your proposed transfer is in your best interest and that it is fair and reasonable.
Structured settlements occur when individuals elect to receive their settlement compensation from lawsuits in regular installments rather than a single, up-front payment. In times of need, the market for selling structured settlements offers individuals immediate access to their future stream of payments. For individuals facing challenges such as foreclosure or eviction, tapping into an asset that is rightfully theirs is critical to overcoming these difficulties. Settlement recipients are entitled to the flexibility to access their funds when they most need them.
In circumstances like these, individuals cannot afford unnecessary delays in the judicial review process — and rule changes in Maryland will significantly lengthen court procedures. Industry leaders support efforts to safeguard consumer interests through disclosure and transparency requirements, as well as by educating payees about their potential agreements. Still, Maryland’s Judicial Review Committee should pursue a solution that both protects consumers, including their right to privacy, and maintains the flexibility the structured settlement purchasing industry provides.
Th NASP is the only professional trade organization that is currently available to join for those who do business in the secondary structured settlement market. The NASP is there to ensure that the secondary market withholds standards of ethic, integrity, and sustains the viability of business in the secondary market. They just wrapped up their annual conference which was held in Las Vegas, Nevada this year and the organization has many benefits to it’s members such as:
Professional Development & Education where you can learn about ways you can avoid losses and problems in the industry, updates on the latest legal issues and news about anything that is new in the structured settlement world such as providers issuing new paper and those exiting the industry. They also set you up with a fraud database to avoid jokesters and fakers who are out to just waste your time.
There are times, though, when the judge will deny your sale. It is difficult to say exactly why judges deny sales, though we touch on some of these reasons throughout the guide. The truth is, a thorough search of the internet, discussions with companies, and reviews of court cases still shows that there are many different reasons for denial, and each depends on the unique situation. However, our research showed that the most common reason for denial of a sale was when the judge felt that the cost of the sale was too high.
For example, in 2012 a woman tried to sell her payments to J.G. Wentworth. The judge turned her down. She was trying to sell payments totally $130,000 and had been offered just $15,000 for those payments. The judge said that this was far too much of a loss and denied.