California Structured settlement are fairly new way of settling personal injury claims. In the essence, instead of receiving one big lump sum, you will get regular installments, monthly or annually, for a period of time.
Enabled by Congress in 1982, they have proved to be very flexible, as they offer plenty of opportunities to be tailored to suit everyone's need. The possibilities in which structured settlements can be set up are practically unlimited. For instance you can arrange for monthly payments, nut every 2 years, you can get an increase, in case you need to purchase expensive medical equipment.
However, there are some disadvantages of structured settlement, the main one being the fact that you can't change them once they are signed.
So, if you ever find your self in a situation that you need extra cash, you can't get it from your settlement, as the terms of it can't be modified. Your only solution is to sell all or a part of it to a specialized company that deals with purchasing of structured settlements.
In California the market is regulated by the new law, passed in 2010. It is called California Structured Settlement Protection Act. This act allows the sale of a settlement only if it is in the best interest of the seller. Every sale has to be reviewed and approved by the court.
When deciding, court will have not just the welfare of the seller in mind, but also his or her dependants. If their interests are not best served, the court may decide to not allow the purchase to continue, regardless of the seller's wishes.
California Structured Settlement Protection Act is also unique as it prohibits the companies that buy structured settlements to charge provision to the sellers. It also prohibits several other provisions that are standard in some other states, like the buyer's first right of refusal.
This means that if you sell just the portion of your settlement, but then decide to sell the rest on the later date, the buyer cannot force you to sell it to him. The companies that buy structured settlements also have a practice of adding a clause in the contract which forces their clients to pay for all of the legal fees in case the matter gets to the court. Under California Structured Settlement Protection Act this is also prohibited. In essence, California structured settlement market just get the most regulated market in the country.
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