The Selling Process Flashcards
6 cards from real Sell Structured Settlement practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 The Selling Process flashcards as text
What is 'shopping around' most important for when selling structured settlement payments?
Answer: Obtaining quotes from multiple factoring companies to compare discount rates and net offers
Comparing offers from multiple factoring companies is critical because discount rates and fees vary significantly, directly affecting the net cash the payee receives.
Which court typically has jurisdiction to approve a structured settlement transfer in the US?
Answer: State court in the payee's state of domicile or where the settlement was established
Transfers are approved by state courts — typically in the state where the payee resides — as each state's SSPA grants jurisdiction to its own courts.
After the court approves a structured settlement transfer, how long does it typically take for the payee to receive their lump sum?
Answer: Within a few days to a few weeks after the order is finalized
Once a court order is entered and any appeal period passes, the factoring company typically funds the lump sum within a few days to a few weeks.
What is a 'rescission period' in a structured settlement purchase agreement?
Answer: A window of time during which the payee can cancel the agreement without penalty
Many states require a rescission period — typically 3 business days or more — during which the payee may cancel the transfer agreement without any penalty.
Why might a court deny a petition to transfer structured settlement payment rights?
Answer: The transfer is not in the best interest of the payee and any dependents
Courts apply a 'best interest' standard and will deny a transfer if the judge finds the sale would harm the payee's or their dependents' financial well-being.
What does the 'effective annual rate' help a payee evaluate when selling structured settlement payments?
Answer: The true annualized cost of giving up future payments in exchange for a lump sum
The effective annual rate expresses the discount in annualized percentage terms, allowing the payee to compare the cost of the transaction to other financing alternatives.