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

Virtually every US state has enacted a Structured Settlement Protection Act (SSPA) that sets out the requirements for a valid transfer of structured settlement payment rights.

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

Nearly all US states (48 or more) have adopted SSPAs, creating a near-universal state-law framework requiring court approval for transfers.

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

The 'best interest' standard is the central test courts apply under SSPAs — the judge must find the transfer serves the payee's and dependents' financial interests.

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 factoring company typically bears responsibility for preparing and filing the transfer petition with the court and covering associated court costs.

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

SSPAs require that the annuity issuer, the obligor (insurance company), and other interested parties receive formal notice of the transfer petition so they can appear and object if warranted.

Sell Structured Settlement Practice Test

Sell Structured Settlement Practice Test

Sell Structured Settlement Legal Requirements and Court Approval