California Structured Settlements: The Golden State of Selling Settlements

Laws in Schwarzenegger’s California concerning selling structured settlements, passed in 2000, require that any transfers of structured settlement payments be approved by a court (or administrative authority, depending on the case) and that the best interest of the party currently receiving settlement payments be considered. In addition, the buyer of the settlement must advise the settlement recipient of their right to seek legal help in connection with the requested transfer and to let them know that they will cover the recipient’s legal fees of up to $1500. Not to mention the fact that in California, workers comp claims cannot be transferred and a copy of said agreement has to be filed with the state Attorney General’s Office. A bit complex I know, but other than those things, the rules and regulations regarding selling your structured settlement for cash in California are the same as they would be if you lived in Montana or Pennsylvania. The best thing to do to make sure your rights are not trampled on would be to first find an attorney to inform you of the laws in your state regarding selling off your structured settlement payments so you know what you’d be getting yourself into should you decide to sell your structured settlement as a California resident.
Many California residents are familiar with tactics factoring companies use to get them to trade in their structured settlements for much less money in the form of a lump sum payment. It may start with a telemarketing call, or it may be even more subtle in the form of tv commercials. If you give them an opening, one or more will swoop in and try to present the most attractive package they can to get you to give up your possible retirement income in favor of what may seem like a great deal. It sounds good alright. Especially if the reason behind the settlement has left you with mounting medical costs, mortgage payments, and other bills that you can’t cover.
This is not to say that you shouldn’t, as a legal resident of California, sell off your structured settlement as the above is a good reason to get a lump sum payment of more money rather than waiting for less (even less in fact due to inflation reducing how much money in general will be worth in the future). As a matter of fact, the above reason is one of, if not the only reasons to “cash in” your settlement in favor of a payout that, in actuality, will only be for 50 percent or less of the total amount of your settlement amount. Yes, less than 50 percent sounds daunting, but desperate times call for desperate measures as the saying goes so you very well may want to take it. Hopefully you won’t, but crazier things have happened as they say. It may be possible to invest the payment as capital as well so if you’re smart and don’t need the payment to survive, you may make more money later.