Sell Structured Settlement Legal Requirements and Court Approval 3

Question 1

What is a 'qualified assignment' in the context of structured settlements?

Accepted Answer

A tax-free mechanism where the defendant assigns the payment obligation to a third-party assignee company

Answer

The payee selling payments to a factoring company

Answer

A court order approving the original settlement

Answer

A broker certification credential

Question 2

After a court issues an order approving a structured settlement transfer, what is typically the next procedural step?

Accepted Answer

The order is served on the annuity issuer and obligor, who then redirect payments

Answer

The payee must re-litigate the original injury case

Answer

The IRS must separately approve the transfer

Answer

The factoring company must register the order with FINRA

Question 3

Which of the following would most likely cause a judge to deny a structured settlement transfer petition?

Accepted Answer

The payee has no stated reason for needing the funds and the discount rate is 20% or higher

Answer

The payee is over age 65

Answer

The payee plans to invest the lump sum conservatively

Answer

The factoring company is headquartered in another state

Question 4

What role does the payee's attorney typically play in a structured settlement transfer proceeding?

Accepted Answer

The payee's attorney independently advises the payee about the transaction's terms and implications

Answer

The payee's attorney prepares and files all court documents on the payee's behalf

Answer

The payee's attorney receives a percentage of the lump-sum payment

Answer

The payee's attorney approves the discount rate used by the factoring company

Question 5

Which US state was among the first to enact a Structured Settlement Protection Act?

Accepted Answer

Texas

Answer

New York

Answer

California

Answer

Florida

Question 6

What must a factoring company provide to the payee at least 3 business days before the payee signs the purchase agreement under most SSPAs?

Accepted Answer

A written disclosure statement showing the discount rate, fees, net payment, and total payment value being sold

Answer

A copy of the annuity contract

Answer

A letter from the original judge who oversaw the injury case

Answer

Proof of the factoring company's state license