Article 2.3 Transfers of Structured Settlement Payment Rights

A Hypothetical Transfer of Structured Settlement Case:  Is this like you?


Claimant "A" who is almost 21 today was injured in a car accident with her parents at age 5.  A minor settlement was approved by a judge, Judge "X" that normally doesn't do structured settlements, because the other Judge was in a holdover session in another county.  That settlement provided for the payment of her medical bills, and 240 monthly payments that will begin when Claimant "A" reaches age 21, and her monthly payment will increase 2% every twelve months.  At the time of this request, Kim wants to sell all of her 240 payments (which will start at $5000 per month) to a transfer company.

  • The aggregate of all these payments would be $145,784.16
  • The discounted present value of that amount today is $93,442.00 (The discounted present value uses the applicable federal rate of 4.5%)
  • Claimant "A" wants to sell it today for a payment of $48,700.00. The $48,700.00 represents 52.10% of the estimated present value based upon the discounted value using the applicable federal rate.

Claimant "A" tells the judge, in support of her motion that she needs the money for a medical treatment of one of her two small children, who has a condition that requires a corrective procedure.  She can't get government help because it's not life threatening.


Claimant "A" works at Walmart making minimum wage and the father of the child doesn't provide any financial support.


Claimant "A" presently has no ongoing medical treatment of her own, but she does still suffer from permanent injuries that cause her to limp and she's often stiff at the end of each day.


Claimant "A" did consult a local attorney who indicated that it probably wasn't a good financial deal, but it was a life choice that she'd have to make.  The Attorney General takes no position.


What do you think happened?  If you were a judge, would you allow Claimant "A" to go through with this transfer?


I have to bring up the question of:  if someone is working a minimum wage job, cash must be tough to come by.  How can a person work with a measly $500 a month?  How about $1,000 a month for 120 months?  This is why you need to consult an independent professional adviser:  to see if it is worth it to sell your payment rights.


Information gleaned from "North Carolina Superior Court Judges 2008 Summer Conference, "The Sale of Structured Settlements" AKA, "Deal......Or No Deal" February 2008 Presented by Judge Ron Spivey, Resident Judge Forsyth County"