Documents which are required and other assorted minutia:
A number of things are involved in the process of selling structured settlements successfully. You have to make sure that you select right buyer, ensure that reason of selling is right and more. You will be needed to know some other things which are as follows:
- Documents required
- How the courts and the judges work
- Laws and regulations
- Personal representation
- More stuff about buyers in Secondary Marketplace
- Paying off your Debt
Let’s start the discussion with required documents, and after that we will move on the list from point to point.
Documentation required for selling structured settlements:
When you decide that it is now the time to sell the structured settlement, you will be needed to start getting the paperwork together. There is not too much paperwork involved in this process; you will need some specific things for both the buyer and the judge. Following is a list of what you will need:
Valid ID – You should have the valid identification issued by the state and you will need two different forms of identification. You drivers license can be one. Passport, Social Security card and birth certificate can also be used. (One form should be a picture ID).
Application for the Sale – You should make sure that you fill the two page form completely. The form will be available from the factoring company, and it must be sent automatically to you.
The Settlement and Release Agreement – A copy of your agreement of Settlement and Release will be required. The document is mostly between 3 and ten pages length. It is what you signed upon acceptance of the structured settlement. A copy of this form would have been provided to you at the time of signing.
The Annuity Policy – There should be a couple of page document with dates of all the annuity payments which extend through till the end of agreement. Dates and amounts for each payment will be listed on it. In case you do not have this document, you can get it from you insurance company.
Annuity Payment Check Stub – A check stub from one of recent annuity payments might also be needed. It is not required always, but it be used in place of some of the other documents. It is better to have this document even in case you possess all the above mentioned documents.
Judges and Courts:
It is difficult to think of anything which has more impact on the final sale than the judge and court that are going to approve the transfer. 48 States have the requirement that a judge should approve the sale, so there are bright chances that you will be attending the court at this stage. Going to the court is a hassle somewhat and in addition you also have to determine if selling is the best decision and it is not a straightforward decision to make. Different criteria are used by different judges in order to determine if the decision you are making is the right one for your family and yourself. So it is important that you are prepared for the question which might be asked by a judge. Following is a brief sampling of the court experience one might have.
What is the need you want to fulfill by selling the structured settlement? What will you do with lump sum amount which you will receive? - It is the most frequent and important question which is asked. One might feel that it is stepping in his privacy as what has judge, got to do with your intentions with your money? However, you will only be able to sale the settlement if you are able to convince the judge that you have a true need for the lump sum.
Are you confident that you have selected the right buyer? - Have you looked at other options? Some buyers are not worth the time and effort. A buyer can have a spotty reputation. Some buyers pay very little. The judge will be making sure that you have chosen quality buyer after doing research.
Do you understand the fact that you will be selling the payments at discount and face value of the settlement will not be paid to you? – Judge will want to make sure that you have received professional, impartial advice. In many states it is a requirement. Judge will also want to ensure that the language of sale agreement does not confuse you or you are not unsure about it.
Did you contact any other parties who are interested? And did you provide them with opportunity to voice their opinions? – The term “interesting parties” can be confusing. It is applicable to anyone having a vested interest in the settlement amount. This includes your heirs. They do have a say, to some extent regarding sale of your settlement.
What happens if the transfer is denied?
It is not a common scenario, but sometimes a transfer of settlement agreement does get denied. A number of reasons can be behind it. In almost 95% cases the judges actually agree to transfers. However, in case the judge is not satisfied with your answers, there is some issue with buyer, or some other problem, the transfer might be denied. Following are some examples of this:
In 2011 a transfer was denied by a court in the Minnesota, because the transfer was not in the best interest of the seller. The seller also did not get independent counsel, and he was denied previously as well on the same transfer.
A transfer was rejected by a court in New York, as the settlement amounted to $70,000 and it was being exchanged for lump sum of only $6,000. It was not in the best interest of the seller and it would have deprived him from a huge amount of money in the future. Another transfer was denied in New York as the court decided that discount rate was quite steep. In this case the transfer was for $31,000 and the settlement amount was $76,000.
It is important to plan in a structured settlement. You should make sure that while going in the selling process, you do have a smart plan. An important aspect of proper planning is to make sure that you are not accidentally breaking another state law. For example, there are some benefits which cannot be reassigned, and will be denied.
You should ensure that the plan is fair and reasonable for both parties. In case the transfer of structured settlement is one sided, the judge will consider it unfair. It means that you should make sure that you are working with some reputable company which is able and willing to take necessary time in order to create a fair transfer.
Finally, the judges are no cold. They are not calculating machines and they are humans who have emotions. Those emotions are often colored by previous encounters and experiences. Some judges might be sympathetic about your case, and some might be almost brusque in the treatment. You should responsive, courteous and listen to the recommendations of the court.
Is there a need for personal representation or not?
Going to the court is a part of selling the structured settlement. It is mandated by the federal and the state laws that only a judge can approve the transfer of your structured settlement. So you will have a day in the court and one might wonder if he needs a personal lawyers. Normally, the answer is yes. One should get an attorney when going in front of a Judge.
It is an important step in order to protect your rights and to make sure that sale is in your best interests. However, it does not mean that you should rush out in order to hire attorney. Usually you will have an attorney given by the company which is buying the structured settlement. In most states you do have the right of bringing your own attorney if you like, and it is mandatory in some of the states to hire your own attorney. Some of the states have a requirement that one should sign a waiver in case they decide not to bring in their own attorney.
Why do you need an attorney?
In case you are wondering that why do you need attorney during this process, there are a number of reasons for this. The most important reason being that transferring a structured settlement in not simple. It is a very complex process and one may require some legal help in order to navigate through the legal waters. The transfer agreement should be handled by attorney who has experience. You should go for a lawyer who has previous experience of the process and has good knowledge about it. An expert is what you need.
Another reason that you should have an attorney is that the judges who are familiar with the sales of structured settlements usually handle all of these for some specific area. It means that the expert whom you will hire might be familiar with that judge and he might have information which can help to make sure that you receive a beneficial verdict.
According to the experts who have observed the process of sale of structured settlement for a number of years, most of the judges usually one of the two positions when they face such sales. The first position is that they will take on a parent or guardian-like role. The second position is that will see the process as process caretaker. The general expectation is to hope that one gets the second type of position from the judge. The second type of judges usually allows one to do more of what he wants to do. The first type of judges is usually hawkish in making sure that one is doing truly what is best for their future.
Working with the attorney:
So far, we have talked a lot about the role of the judge in determining that you are making right decision about your needs. Judge should not be the only person doing this. You will certainly do this too, and your attorney as well. In fact the first line of defense which you have against a bad situation is your attorney. The attorney will have expertise and experience which is necessary to make sure that you are not only receiving a great deal, but the one which is equitable and fair. He will also watch for the hidden threats which are buried in transfer agreements language.
In case you decide to work with attorney who is appointed by the factoring company for you, generally you will meet him few days before the court date. It gives the seller as well as the attorney as chance to know each other, and it also gives the lawyer a chance to go through transfer agreement with you and to also explain the details. You will also have a period of preparation in order to make sure that you are able to answer the questions asked by the judge. It is necessary, as the judge will be asking probing questions regarding settlement, the understanding you have about agreement, and your purpose and need for the sale of settlement.