Your structured settlement payments are coming in
each month as scheduled for an insurance claim and you have no reason to
question but that they will continue to the end of the settlement, but that is
still years away.
Meanwhile, in this upset economy, you lost your
position with the company to which you have devoted ten years of your life, but
these things sometimes happen to the best people through no fault of their
own. Fortunately, you have secured a new
position with another company, but they are across the country. You must sell your house and move.
Unfortunately, the sale of your house is a slow
process in this economy and the prospects for a sale before you must move are
not good. You would rather sell a
portion of your structured settlement to pay for the down payment of a new
residence, but you are concerned about the legality of doing so. Your settlement contract strictly forbids
such a sale for lump-sum payment, even one of just a partial value of the
settlement. As far as you have been told
by the insurance company’s legal counsel, the contract is non-negotiable; the
language is clear.
However, you have also heard that most states allow
the protection of a structured settlement sale. This is
the case in the state you are leaving and the state into which you will be
moving. Who is right? Because most states have these laws, you may
sell the structured settlement with the compliance of a number of requirements.
Legal Requirements of Structured Settlement Sales
1.
Full disclosure
about the financial terms of the sale must be given to you. This is for your full benefit of protection
under the law to be fully informed about all aspects of the sale, your
obligations and your rights. Also, it is
important to know that at no time during the application through funding of the
sale are any of your rights waived.
2.
Written notice
must be given to you advising you of your opportunity, which is encouraged, to
seek independent professional advice regarding your intent to sell a portion or
all of the structured settlement.
3.
A hearing in
court will be held. The judge will
consider the matter before the court, including your financial condition and
consequences, the justification for your request of a sale and if it is truly
in your best interest to sell your structured settlement. The judge
will determine this under all the conditions set before the court and may
decide in your favor regardless of the language of the original contract. The judge has the legal power of amending the
contract.
4.
The judge will
issue the court order to approve the sale and implement the funding. With that court order, the sale and funding
will proceed, unless…
5.
All through the
period of having an offer presented, your acceptance of the offer and even
through the completion of the court’s judgment, you have a “cooling off” period
after you have signed the documents of the sale to change your mind and cancel
the sale.
In effect, the insurance company’s legal counsel
was not entirely correct. While it is
possible that the judge would not find in your favor, if your justification is
reasonable – you are not making the request to waste money in a spending spree
– the judge is likely to find in your favor regardless of the tight, legal
manipulation of the insurance company’s settlement contract.
You should be able to proceed with your move, pay
the down payment and secure a new residence while continuing the effort to sell
your prior home.