Sell Structured Settlement Legal Requirements and Court Approval

Question 1

What are state-level laws governing the sale of structured settlement payments commonly called?

Accepted Answer

Structured Settlement Protection Acts (SSPAs)

Answer

Annuity Transfer Acts

Answer

Payment Rights Assignment Laws

Answer

Consumer Finance Protection Statutes

Question 2

As of 2024, approximately how many US states have enacted their own Structured Settlement Protection Acts?

Accepted Answer

Nearly all 50 states (48+)

Answer

About 10 states

Answer

About 25 states

Answer

Only federal law applies — no state laws exist

Question 3

Under a typical SSPA, the court approving a transfer must find that the transfer is:

Accepted Answer

In the best interest of the payee, taking into account the welfare of dependents

Answer

Profitable for the factoring company

Answer

Approved by the original defendant's insurer

Answer

Consistent with IRS guidelines

Question 4

Who typically files the petition with the court to approve a structured settlement transfer?

Accepted Answer

The factoring company (or its attorney) on behalf of the transaction

Answer

The payee independently

Answer

The annuity issuer

Answer

The original plaintiff's attorney

Question 5

Which parties are generally required to receive notice of a structured settlement transfer petition?

Accepted Answer

The annuity issuer, obligor, and any other interested parties identified by the court

Answer

Only the payee

Answer

The IRS and state tax authority only

Answer

Only the factoring company and the court

Question 6

What does an 'independent professional advice' requirement in an SSPA obligate the payee to do?

Accepted Answer

Obtain advice from an independent attorney, financial advisor, or accountant before completing the transfer

Answer

Hire a financial planner paid for by the factoring company

Answer

Attend a state-run financial education class

Answer

Use a court-appointed guardian ad litem