When Push Comes to Shove, Selling A Portion of Your Structured Settlements Payments May Be Your Only Option, But What Does it Pack?

Contracts and legal agreements enforceable in court have facilitated the evolution of modern economies by providing predictability, certainty, and remedies for parties involved in business. Contact law gives everyone freedom to enter into legal agreements without government interference. Accordingly, parties can introduce esoteric and idiosyncratic terms that reflect specified needs. Anti-assignments clauses incorporated in contracts such as structured settlement agreements have sparked varying judicial opinions on their effectiveness and enforceability. An anti-assignment clause restricts the freedom to assign contractual obligations. US courts have issued conflicting rulings regarding anti-assignment provisions. But not in Connecticut, as state courts follow the contemporary approach of disregarding anti-assignment terms. To ensure anti-assignment clauses receive court approval, the party inserting the clause should use specific language to restrict the power to exercise the right to assign or render such assignment void.

In August 2007, Simon Clifford and behemoth US insurer became parties to a structured settlement agreement in resolution of a personal injury lawsuit. Like other structured settlements, he would not enjoy the piles of cash retrievable in lottery winnings as the money awarded in compensation in a tort claim falls under structured settlements. The agreement entitled Clifford a future income stream, but he also got a lump sum payment and a chain of cyclic payments for a lifetime. The annuity agreement contained an anti-assignment clause that no proceeds recoverable from the annuity may be assigned, either directly or indirectly. Approximately nine months after the agreement came into effect; Clifford was retrenched and gazed at an impending foreclosure against his apartment, where he lived with his wife and daughter. To resolve his economic troubles, he had to sell his vested payments rights in the structured settlement.

Sell Structured Settlement in Connecticut

Connecticut Structured Settlement Protection Act (SSPA) and How Clifford Was Protected

Although the SSPA is not as detailed as the statutes of states with more stringent regulations, Connecticut law requires the buyer of annuities to convey certain disclosures. The structured settlement company informed Clifford he had a 10-days window to review the disclosure statement before entering into a legally binding agreement. The disclosures highlighted the aggregate amounts and pre-determined dates for payments assigned, the gross and net value of the lump sum, listing of all expenses, and a cancellation proviso, to name but only a few.

Independent Professional Advice Proffered

Connecticut state statutes compel the structured settlement funding companies to refer the seller to an independent professional advisor. Clifford received briefings from a firm of attorneys and accountants deciphering the financial, taxation and legal implications of selling his payment rights.

Court Approval Compulsory In Connecticut

Like other US states, Connecticut requires the structured settlement purchasing companies to lodge an application before a county court with competent jurisdiction. Clifford was not involved in the process until he was informed by his attorney the sale had come to a halt as the annuity issuer objected to the transfer. The superior court judge overruled the anti-assignment clause cited by the insurance company and sanctioned the transaction.


Superior Court Affirmed the Trial Judge’s Ruling in Approving Clifford’s Deal

Determined tooth and nail to stop the factoring transaction, the annuity funding company lodged an appeal impugning the findings of the trial judge that the anti-assignment clause was ineffective. The appeal was certified as urgent and dismissed by a three-judge bench which ruled that anti-assignment clauses fashioned in the manner adopted by the appellant were not enforceable. The modern trend in contract law in Connecticut touts the freedom of assignment though the aggrieved party may recover damages flowing from the breach.

Ramifications of Clifford’s Sale on His Financial Position

Clifford assigned only a portion of his payment rights to the annuity buyer and remained with a significant share from monthly payments. He paid off the defaulted mortgage payments and penalties levied, thus avoiding the pending foreclosure. Clifford also got a substantial amount of money that he merged with a loan to buy a Fiat.

Top-Rated Structured Settlement Companies Connecticut

Olive Branch Funding will be your custodian and representative in a complex transaction to help you get a run for your money by filing quick approval applications in court, expediting hearing before the judge and consummate the sale without slashing a king’s ransom from your fund.

Woodbridge Structured Funding has rapidly evolved into a top-notch brand with omnipresence all over the US to lodge your petition in any county court where you reside, convey a personalized transfer agreement, disclosure document and serve all parties well ahead of your time.

Peachtree Financial Solutions can be a profitable buyer for annuitants to trade within the factoring market as they give consumers a money-making price offer, levy exceedingly low rates and ensure the transaction adheres to state and federal laws to preempt future disputes.