For years, medical malpractice attorneys have unsuccessfully tried to persuade courts to allow claims hinged on failure to conduct medical check-ups to detect the underlying onset of illness in asymptomatic patients. The handicap in imposing liability in this class of actions is the fear by the courts of opening a Pandora box of mass tort suits as everyone inhales potentially deleterious substances in the environment. A vast majority of sister supreme courts in many states have dismissed medical monitoring suits where the patients have not sustained physical injury. Nevertheless, some courts have abandoned the conventional approach and recognized the shifting sands of medical technology as to allow plaintiffs to recover compensation. Where asymptomatic claimants contact a disease and physical injury, the court may allow them to recover medical monitoring expenditure.
Stephen Khan was employed by the defendants in a funeral home where asbestos products were frequently used. Khan and other workers were not aware of the products but only discovered later after one of their colleagues died shortly after being diagnosed with a malignant lung tumor. Khan instituted a lawsuit for personal injury for exposure to a dangerous substance by the manufacturer. He recovered compensation for medical monitoring and punitive damages to detect the malignant tumor and other related diseases. Khan got a structured settlement vesting him payment rights to a future income stream. He discovered down the line he needed a lump sum amount. Like lottery winners who get future cash flows for their boon, structured settlement payees can also sell their payment rights for a lump sum. However, getting the money requires compliance with a legal framework at the state level.
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Considerations Before Selling Structured Settlement Payment Rights
Khan had to consider a cluster of factors before selling as a transaction that does not meet the legal requirements will probably be halted by the judge. For instance, if Khan sponged off the periodical payments for basic needs, has lost ability to work, has no pressing need for cash payment and alternative options. He analyzed his annuity contract to determine what he could skim off for structured settlement buying companies.
Process of Selling His Structured Settlement Payment Rights
To sell his future cash flows for a lump sum award, Khan had to get court approval. The judge scrutinizes the transaction and relevant documents such as underlying annuity contract. The discounted lump sum value, discount rates and annual interest, and expenses borne by Khan had to meet the test of fairness to pass muster.
It took one month and one week to obtain a court order. Structured settlement purchasing companies will handle the laborious documentation process. The judge has to make findings the transaction does not contravene federal and state laws. Additionally, all interested parties have their crack of the whip and may delay the process with anti-assignment objections. Khan got lucky as he did not encounter such difficulties.
Factors to Consider When Bargaining for a Whacking Lump Sum
Khan sought the structured settlement funding company with the lowest discount rate. The discount rate employed will rely on factors such as the total value of payment rights assigned, solvency status of the annuity issuer, term, life contingency and costs of financing fees. However, you need a sharp eye for details to ensure the transaction has no hidden fees as this eats into the lump sum held out.
What is a “qualifying order”?
The Internal Revenue Code was amended by Congress to introduce a tax exemption for all transactions approved by the court by entering a qualifying order. The order requires the court to balance the interests of the seller and structured settlement funding companies. A court can deny the order where the parties have breached federal or state laws. Additionally, if Khan’s structured settlement payments have a previous court order prohibiting further sales, an attempt to flout it exposes the transaction to the 40% excise tax penalty.
The Top Brass In The Factoring Industry-Best Structured Settlement Funding Companies
SenecaOne will deliver a custom-made transfer agreement, disclosure statement and court filing documents to romp your transaction through court in the shortest duration, reviews underlying annuity contracts to determine viability and deliver a free quote.
Woodbridge Structured Funding provides each seller with a representative to help you get court approval before a judge in the appropriate county court, gives the highest lump sum price offer, and uses a low discount rate.
Stone Street Capital is the dominant company in the factoring industry due to their minimal transactional fees and expeditious processing of each annuity. As a buyer of structured settlement payments, the company has 100% customer satisfaction rate.