Sell Structured Settlement The Selling Process 2

Question 1

What does 'partial sale' mean in the context of structured settlements?

Accepted Answer

Selling only some of the payments rather than the entire stream

Answer

Splitting the settlement with a co-payee

Answer

Selling payments from only one defendant

Answer

Transferring rights to a family member

Question 2

Which type of structured settlement payments CANNOT typically be sold or transferred?

Accepted Answer

Workers' compensation settlement payments in most states

Answer

Fixed monthly payments

Answer

Deferred lump-sum payments

Answer

Guaranteed annuity payments

Question 3

After a payee signs a purchase agreement, most Structured Settlement Protection Acts require a mandatory waiting period before the court hearing. How long is this typically?

Accepted Answer

At least 3 business days to receive disclosure, then varies by state

Answer

3 days

Answer

90 days

Answer

6 months

Question 4

What information must be disclosed to the payee under most state Structured Settlement Protection Acts before a transfer can proceed?

Accepted Answer

The discount rate, fees, net payment amount, and total value of payments being sold

Answer

Only the lump-sum amount to be paid

Answer

The name of the annuity issuer only

Answer

The payee's original injury details

Question 5

What happens if a factoring company fails to comply with IRC Section 5891 when purchasing structured settlement payments?

Accepted Answer

A 40% excise tax is imposed on the factoring company

Answer

The transfer is voided automatically

Answer

The payee must repay the lump sum

Answer

The annuity issuer assumes the obligation

Question 6

Which of the following best describes the role of the annuity issuer during a structured settlement transfer?

Accepted Answer

The annuity issuer is notified and redirects payments to the factoring company after court approval

Answer

The annuity issuer must approve and reissue the annuity to the buyer

Answer

The annuity issuer cancels the original annuity and issues a new one

Answer

The annuity issuer has no involvement in the transfer process