Structured Settlements: How to Handle Anti-Sale Provisions

Some Structured Settlements Contain Anti-sale Provisions

Structured settlements are annuities that are awarded to plaintiffs who win personal injury lawsuits. In some instances, recipients choose to sell their structured settlements in order to fund a child’s education, make a major purchase, or put a down payment on real estate. However, suppose you receive a structured settlement that contains an anti-sale provision in its policy? For instance, the annuity may contain language to the effect that you cannot sell or assign the payments.

A Judge’s Ruling for the Sale of your Structured Settlement Can Override any Terms that Prevent the Assignment or Sale of your Payments

Nevertheless, even if your structured settlement policy contains language that does not permit the assignment or sale of your payments, you can sell your payments. In order to do so, you must obtain a court order and get approval from a court of law to sell the payments. So, although your annuity policy contains language that does not allow the sale of your structured settlement payments, you can still effect a transaction upon a judge’s approval. However, for the judge to permit the sale, he must also believe that the sale will be to your benefit.

Initiating a Sale

If you are unsure about how to go about selling your structured settlement, then it’s best to consult an attorney who is knowledgeable about the process. Initially, you should be provided full disclosure about the sale terms by the company or broker who buys your structured settlement. In addition, the company that buys your annuity policy should give you a written statement recommending that you obtain professional consul about the sale. Some states do not require the inclusion of this written statement, so check about this rule for your locale.

Once a Judge Approves the Sale, a Court Order will be Issued

After these initial steps, a judge will review the sale terms and your financial circumstances to determine if the sale is justified. Once the judge approves the terms of the sale, the issuance of a court order will follow which completes the transaction. If anti-sale provisions are included in the settlement terms, then a judge’s ruling can lift these restrictions from the settlement package.

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