Thursday, 15 August 2013

A Brief Look At The History Of Structured Settlements

The concept of structured settlements was mooted years ago when it became obvious that an individual paying a lump sum to another can be a bit destabilizing given his/her financial position. Basically, this proposition or concept was arrived upon following the delicate nature of payouts and the strain it might have on an individual. Structured settlements are a form of compensation whereby one person undertakes to pay the other an agreed amount of money regularly for a given period of time. The payment made from one person to another ensues after a legal action where one undertakes to compensate the plaintiff.
What usually happens is that when a person takes the other to court for some form of damages and a decision is made in his favor, then the defendant has to make the agreed settlement based on his agreement with the plaintiff. The defendant with the help of an insurance company undertakes to make the agreed payment over a period of time. What basically transpires is that the said insurance company applies for an annuity policy from another insurance company whereby the plaintiff or claimant is assured of regular payouts.
As recent as the year 2000, transferring of structured settlements was a nonexistent phenomenon. The law did not allow for individuals to transfer or sell their annuity of structured settlements . However, congress, in the year 2001 passed a law that inadvertently signed by the then president bush allowing for individuals to transfer and sell their structured settlements . Since the settlements are legally binding, one had to provide reasons to a judge as to why he/she needed to sell the settlement and whether it was for the good of the prevailing economic circumstances. The transfer can only be done with the full approval of a court of law and all disclosures made to the seller and buyer.
For the transfer to be considered legal, a judge from a court of law must examine the facts placed before them and make a decision as to whether the sell is actually in the best interest of the seller and that its germane. Following the signing of the law allowing people to transfer their structured settlements , there have been increasing cases of individuals selling these settlements for whatever reasons that they deem fit. Some sell them because they want to offset a debt, some for the purposes of continuing their education, others because they want to venture into business and others simply to purchase or buy a house.
Whatever the reason is, the buck stops with the judge from a court of law who must carefully weigh the options, determine the financial position of the seller and find sufficient reason as to why one should sell their structured settlements today. The legal action set in place is specifically designed to allow both the seller and buyer with sufficient grounds to fully understand the procedures set therein and to avoid any sort of exploitation. In essence, a brief look at the history of structured settlements and how they came about is a good way to familiarize oneself with this very important subject. About the Author
Verniel Cutar writes about many topics such as health, business, and structured settlements . If you are looking for information on how to sell structured settlements , visit Quotemeaprice, an online portal that educates people how to easily sell annuity payments and other related information.

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