Did you know that in
order to sell your structured settlement, you will have to appear in front of a
judge at a settlement hearing?
If not, don’t worry. The laws that govern structured settlements are
generally designed to protect you, the claimant. Since 2002, the Internal
Revenue Code Sec. 5891 has been put in place to make sure that selling the
structured settlement is in your “best interest” – meaning that it will
actually help you accomplish a stated financial goal that is meant to benefit
you or your family. The Code also requires a judge to check that the sale is
fair and balanced, meaning that the company buying your settlement is being
honest and not trying to scam you or rip you off by charging an unreasonable
rate. These are the primary purposes of your hearing!
What Questions Could
I Be Asked?
It’s likely that the
court will require you to confirm your identity, and that you understand what
it is you are selling as well as the terms of the sale including whether you
understand the value of what you are selling and how much you will receive from
the sale. They will likely also wish to know whether you sought out independent
advice from a financial professional about what to do with your settlement.
The judge will ask whether you want the transfer of payments approved, and,
most importantly, they will ask you to describe the way in which you intend to
use the money you earn from the sale. It’s important to present any supporting
evidence you may have that could convince the judge that your plan for the
proceeds of the sale will benefit you: for example, if you’re buying a home,
you could show the judge the mortgage pre-approval and the real estate listing.
Essentially, you are called upon to do whatever you can to prove that the
decision to sell payments has not been made in the spur of the moment, that you
have a plan, and are willing and able to act on it.
If you’ve sold a portion of your settlement in the past and are looking to sell more, the judge may ask you to explain and provide proof of what you used the money for from your previous sale. Essentially, the court will check that you’ve been responsible with your money since the first sale, and make sure that you will do the same in the case of a second. In any situation, Genex Capital and its experienced team will help you get ready for court to make sure you have the highest chance of approval!