Protections For Consumers

Most states have certain protections in place for those selling structured settlement payments to a third party. All state laws regarding such transfers differ slightly. In general, however, all state regulations require:

  • Full disclosure from structured settlement buyers: Funding companies are obligated to provide a disclosure that includes all of the terms of the transaction in a very clear and concise manner for the protection of the seller.
  • A “cooling off period:” The seller must be allowed a period of time during which s/he can reconsider the decision to sell structured settlement payments
  • Court approval: all sales or transfers of annuities or structured settlement payments must have the approval of a judge. This approval will depend largely upon the seller’s unique financial situation and whether or not it is determined that such a sale is in the seller’s best interests.

You can learn more about your state’s structured settlement protection act below:

DELAWARE CODE ANNOTATED

TITLE 10. COURTS AND JUDICIAL PROCEDURE

PART IV. SPECIAL PROCEEDINGS

CHAPTER 66. STRUCTURED SETTLEMENTS

Revisor’s note. — This chapter became effective upon the signature of the

Governor on May 26, 2000.

 

Section 2 of 72 Del. Laws, c. 303, provides: “Nothing contained in this

chapter shall be construed to authorize any transfer of structured settlement

payment rights in contravention of applicable law or to give effect to any

transfer of structured settlement payment rights that is invalid under

applicable law.”

 

Section 3 of 72 Del. Laws, c. 303, provides: “This chapter shall apply to any

transfer of structured settlement payment rights under a transfer agreement

entered into on or after the thirty-first (31st) day after the date of

enactment of this chapter [May 26, 2000]; provided, however, that nothing

contained herein shall imply that any transfer under a transfer agreement

reached prior to such date is effective.”

10 Del.C. Pt. IV, Ch. 66, Refs & Annos