Defining the Structured Settlement Protection Act
The Structured Settlement Protection Act – A Key Safeguard for Sellers of Structured Settlements
If you will soon receive a structured settlement annuity or want to sell your structured settlement, then it is a good idea to have a basic understanding of the Structured Settlement Protection Act, which was implemented in 2002. This piece of legislation is especially helpful to know if you are planning to sell a portion of or all of your structured settlement.
Some Stipulations
The Structured Settlement Protection Act requires that sales transactions involving structured settlements must first be permitted by the court or have a judge’s approval before they can be processed. In addition, if an insurance company is obligated to make payouts for a structured settlement, then the Structured Settlement Protection Act also stipulates that the insurer must be included in the sales process. All the parties too must be given notice of a partial sale or sale twenty days, at the minimum, before a legal hearing is scheduled.
Some of the Steps of the Process
The Structured Settlement Act then makes it a requirement that the court review the reasons for a sale and that a judge decide whether or not it is feasible or practical for the seller to proceed with the transaction. In order for a judge to make a decision along these lines, the holder of the settlement must present all the details with respect to the terms of the structured sale as well as his current financial data. This information must be submitted three days prior to any agreement.
The Obligation of the Company or Broker Buying the Structured Settlement
The broker or company that is seeking to buy a structured settlement is obligated legally to disclose any data associated with the sale. After the sale is made, the seller has a grace period of three days in order to back out of the transaction. In addition, according to the Structured Settlement Protection Act, the company or broker buying the annuity must recommend to the seller, in writing, that he obtain advice from an expert in structured settlements before agreeing to sell the annuity.
The Structured Settlement Protection Act Provides Protection for the Seller
The Structured Settlement Protection Act is meant to protect consumers who sell their settlements from unscrupulous buyers. Before the law was enforced, many structured settlements were purchased with the buyer assessing large fees. Therefore, the act has made it possible for people to sell their structured settlements for cash without being cheated out of a good portion of the money.
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