Structured settlements have been around for almost 25 years, and factoring companies emerged as an ancillary to the schemes. By 1997, a total of thirty-eight states had adopted a Structured Settlement Protection Act (SSPA) mandating court approval for the assignment of payment rights to factoring companies. The Commonwealth of Massachusetts enacted its SSPA on January 12, 1991, by incorporating G.L.C. 231C. Although each state in the US has a different SSPA, they impart from model legislation embodying an analogous objective. Factoring companies have pitched their tents in Massachusetts since the early 1990s and help cash-strapped annuitants and payees to cash in their payments on a previous date. In construing the Massachusetts SSPA, the courts apply the “best interests” test to determine whether to approve or disapprove the sale of structured settlement payment rights.
Polycarp Cardozo became the beneficiary of a structured settlement after receiving compensation from a lawsuit where she got exposed to lead poisoning in residential premises. The agreement provided him one hundred and thirty monthly payments of $2,300 each guaranteed for 20 years. Polycarp graduated from high school passing the final exams with flying colors. He had already been admitted to a nursing school in Massachusetts but needed more money to foot her tuition fees as she could not get a loan. She sought to hive off a proportion of her settlements to raise a substantial lump sum. Like lottery winnings, you can capitalize on your income stream to access a significant portion of the money in advance as a discounted lump sum.
What Test Do Massachusetts Court Apply Before Approving Transactions?
To sail through the judicial phase of a factoring transaction, Polycarp had to demonstrate to the court the sale was in his best interests and the proposed assignment would comport with the raison d’être of the state’s SSPA. He sought the court’s wisdom to help him make a critical decision and meet an urgent financial need. To enforce the transaction which would allow him to garner enough money to pay his school fees, this would propel him to a better quality of life. The court also assesses the discount rate to ensure it does not overreach the discounted payment. With his promising career in nursing, he would still meet financial demands and obligations in future even when the structured settlement payments had been dissipated.
Get the Terms of the Proposed Transfer Down to A Fine Art
Lead poisoning tort victims like Polycarp got compensation to safeguard against the loss of income projected on deteriorated cognition. However, Polycarp managed to make it to nursing school and exhibited great mastery and talent. However, he did not possess the financial acumen as to appreciate the financial, legal and tax ramifications of the transactions. He sought independent advice. His parents arranged a consultancy with an attorney habituated with structured settlements. When the judge examined him on the substratum of the transaction, he demonstrated an acute understanding of all figures. The court had to sanction the deal as he discharged the burden of proving the proposed sale was in his best interests.
Does Court Approval Mean You’ve got A Sizeable Lump Sum In Your Pocket?
Yes, courts seized of the factoring petition undertook an objective evaluation to ensure the net amount cashable to Polycarp was fair, justifiable and reasonable under the prevailing circumstances. The disclosure statement showed Polycarp borrowed the money at an interest rate equal to mortgage rates in the real estate market. Assigned payments represented 60% of their calculated present value. The court approved the terms as fair and reasonable. You should also ensure the transaction has no hidden fees except the itemized list contained in the disclosure statement.
Structured Settlement Factoring Funding Companies at the Top of the Pile
Peachtree Financial Solutions files a statutorily compliant petition in court, pleads your case before the judge for speedy signing off of the transfer agreement after exercising due diligence to determine transactional eligibility. They give sellers of structured settlements a price offer, free quotes, and warm customer support.
Stone Street Capital is an experienced buyer of structured settlements with a proven record and factoring process. The company provides an official representative to ensure your transaction is beyond reproach with fast turnarounds for annuitants and payees racing against the clock to meet financial exigencies.
Fairfield Funding allows you to cash in your structured settlements, lottery winnings or annuities at an earlier date. The company has specialist structured settlement novation attorneys versed with the substantive and procedural laws governing factoring across all US states.…