The answer here is yes – and 47 states have laws in place regulating selling structured settlement payments for the protection of both the seller and the buyer. Three states – New Hampshire, North Dakota and Wisconsin – do not currently have any regulations governing structured settlement sales. However, it is still possible for residents of these states to sell their structured settlements to a funding company and have that transaction carried out under the laws of the state in which that company or insurance carrier is domiciled.
Prior to 2002, selling structured settlement payments was not so easy. Even today, some structured settlements contain language that prohibits the terms of such a financial arrangement from being changed – including having payments accelerated, increased or decreased, or having the settlement “reassigned” (as in sold to someone else) or “encumbered” (being used to secure a debt). However, federal statutes were signed into law to cirumvent such language. Today, the decision as to whether or not to allow the transfer or sale of a structured settlement rests with the judge.
This is important to understand. Although there are no laws specifically prohibiting the sale of structured settlement payments, the court must still approve such a sale. If the judge decides at some point that the sale of your structured settlement is not in your best interest, s/he may deny the request.
A reputable and honest funding company should be able to determine, through its own legal staff, whether or not it’s a good idea for you to complete the transaction before it is turned over to the court. Although CBC Settlement Funding is in the business of buying structured settlements and other annuity payments, we reserve the right to refuse a transaction if we believe it is not in the client’s best interests.
You are also encouraged to consult your own attorney if you have questions or concerns.