A structured settlement is a periodic payment arrangement, often financed with single-premium annuity contracts, that compensate victims for their injuries over time, rather than in one lump sum.
Margaret Mannix tells the story of Orion Olson, who began experiencing vision and neurological problems associated with injuries sustained from a dog bite. These complications began at age three and continued to plague him as a child. He encountered significant hardship in his teens and later found himself homeless. However, there was hope; when Olson turned 18 he would begin collecting on his structured settlement over a period of time, totaling $75,000. Unfortunately after receiving his initial payment of $7,500, Olson realized that the money would not be enough to sustain him.
Television advertisements offered single lump sums in exchange for settlements like his, so he sold the remaining $67,500 to a finance company. The amount he received in return? Just $16,500. In just six months the money was gone, and Olson was living out of his car.
Since 1997, nearly all states have passed some form of the Structured Settlement Protection Act, which makes the transfer of structured settlement payments impossible without prior court approval. In California, that regulation is spelled out in the California Insurance Code Section 10139.5. The state legislature has sought to avoid situations like Olson’s by asking courts to determine whether a structured settlement sale is in the victim’s best interest.
Part of that protection gives you the right to a consultation with an attorney at no cost to you (the purchaser of the structured settlement must pay any legal fees associated with you exercising your rights).
If you have a structured settlement and are considering a sale, it doesn’t hurt to have someone on your side take a second look. You may be able to get a better deal, or you may decide to go ahead with the transfer. Either way, you’ll have peace of mind knowing that an experienced attorney was there to protect your rights. As Daniel W. Hindert and Craig H. Ulman noted in Transfers of Structured Settlement Payment Rights: What Judges Should Know About Structured Settlement Protection Acts, “[buying] companies often charged sharp discounts to payees who were ill equipped to appreciate the value of their future payments” and “[i]n some cases, [buying] companies charged discounts equivalent to annual interest rates as high as 70 percent.”
The Imburg Law Firm has worked with many owners of structured settlements to review potential sales. Call (209) 577-6666 to schedule a free review. Let us help make sure you get the best deal possible.