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August 31 - Newsblog #1
Your Injury Attorneys in the News: Homeowner and Wife Sue over Police Shooting
September 7 - Newsblog #2
Your Injury Attorneys in the News: Homeowner’s Possession of Handgun Legal Under 2nd Amendment
September 14 - Newsblog #3
Your Injury Attorneys in the News: if a Government or Government Agency is at Fault, You Can Sue
September 21 - Newsblog #4
Your Injury Attorneys in the News: Lawsuit Against Police Department Invokes the Civil Rights Act
September 28 - Newsblog #5
Your Injury Attorneys in the News: a Clear Line from the Action – or Inaction – to the Injury
October 12 - Newsblog #6
Your Injury Attorneys in the News: Police Insensitivity Turns Traffic Stop into a Travesty
October 19 - Newsblog #7
Your Injury Attorneys in the News: Police Who Abuse Power Must Be Held Accountable, Law Professor States
October 26 - Newsblog #8
Your Injury Attorneys in the News: Holding Overly Aggressive Police Accountable
November 2 - Newsblog #9
Your Injury Attorneys in the News: Brown Vs. Impd Case About Much More Than Punishment or Money
November 9 - Newsblog #10
Your Injury Attorneys in the News: Improper Medical Diagnosis and Care Resulted in Loss of an Eye
November 16 - Newsblog #11
Your Injury Attorneys in the News: Medical Malpractice Claims Have a Front End and a Back End
November 30 - Newsblog #12
Your Injury Attorneys in the News: Truths About Medical Malpractice
December 7 - Newsblog #13
Your Injury Attorneys in the News: Yes, You Can Sue City Hall
December 14 - Newsblog #14
Your Injury Attorneys in the News: Slip and Fall Changes Two Lives Forever
December 28 - Newsblog #15
In the News: Ramey & Hailey Year in Review
January 4 - Newsblog #16
In the News: Teen’s Sexual Abuse Case Calls Attention to the Problem
January 11 - Newsblog #17
In the News: Parents of Survivor Sue Parents of Shooter
January 18 - Newsblog #18
In the News: Erin Brockovich Teams Up with Indiana Moms
January 25 - Newsblog #19
Your Injury Attorneys in the News: Case Settled in Favor of Catastrophic Slip and Fall Injury Victim
January 31 - Newsblog #20
In the News: Wrongful Death Lawsuit Filed Against Rehab Facility
February 8 - Newsblog #21
In the News: Nurse Arrested in Sexual Abuse Case
February 15 - Newsblog #22
In the News: Running the Clock on Indiana Medical Malpractice
February 22 - Newsblog #23
In the News: to Repeal or Not to Repeal – Indiana Legislators Rule “not”
March 1 - Newsblog #24
In the News: Helping Physicians Keep Helping
March 8 - Newsblog #25
In the News: Parents of Brain-damaged Infant Sue Hospital
March 15 - Newsblog #26
In the News: Owner of Gun Wins Decision
March 22 - Newsblog #27
In the News: Indiana House Passes Long Term Care Protections Bill
April 5 - Newsblog #28
In the News: Slip-and-fall Victim Wins Right to Sue Dollar Tree
April 12 - Newsblog #29
In the News: Inspection Report Shows Vets Harmed at 52 Nursing Homes
April 19 - Newsblog #30
In the News: Sandwich Diversion Causes Fatal Two-semitrailer Crash
April 26 - Newsblog #31
In the News: Does Premises Liability Cover Goose Attacks?
May 10 - Newsblog #32
Two-week-old N.y. Verdict Offers Takeaways for Slip and Fall Victims
May 17 - Newsblog #33
In the News: Barrel Blast Triggers Wrongful Death Lawsuit
May 24 - Newsblog #34
In the News: when a Product Manufacturer is Not at Fault
May 31 - Newsblog #35
In the News – College Doc’s Sexual Abuse of Students Coming to Light
June 7 - Newsblog #36
In the News – One Week, Four Motorcycle Accidents
June 14 - Newsblog #37
List of Troubled Nursing Homes Released
June 21 - Newsblog #38
In the News: Kansas No-caps Ruling Changes Personal Injury Climate
June 28 - Newsblog #39
In the News: Jury Awards $10.5 Million for Pain and Suffering in Birth Injury Case
July 5 - Newsblog #40
In the News: More Indicted in Last Year’s Duck Boat Tragedy
July 17 - Newsblog #41
In the News: Richard Hailey on Litigation Team for Lawsuit Vs. Tesla
July 24 - Newsblog #42
In the News: Malpractice Lawsuit Yields Largest Award in History
August 28 - Newsblog #43
In the News: Trucks V. Passenger Cars – Score 18:116. Everybody Loses

Medical Malpractice Newsletter

Selling Structured Settlement Payments for a Lump-Sum

Many people enter into a “structured settlement” as a result of recovery on a legal claim, such as personal injury, medical malpractice, or workers’ compensation. A “structured settlement” takes a lump-sum award and turns it into a series of payments that may last for a specified period of time. This is usually accomplished by the purchase of an “annuity contract.”

Annuity contracts are commonly sold by certain insurance companies. A lump-sum “premium” is paid for a guaranteed stream of future payments. However, the recipient’s circumstances can change, prompting some recipients to sell the rights to the periodic payments for immediate cash.

Sale of the Rights to Structured Settlement Payments

There are numerous entities willing to purchase a stream of payments, whether from a structured settlement or other source, such as lottery winnings. The process usually begins with calculation by the purchaser of the “net present value” of the settlement payments (NPV). NPV is basically the current value of a future payment. For example, if a recipient is entitled to receive $100 ten years from now, that right is worth less than $100 right now, due to inflation and other factors. By applying an accepted “discount” percentage rate, NPV can be calculated.

Purchase options may include:

  • Full purchase – the purchaser commonly calculates NPV of the payments and offers a lump sum, usually substantially less than the total initial amount or even the NPV
  • Purchase of a specific number of payments – only a specific number of the future payments are purchased at a discounted NPV rate
  • Purchase of a portion of each payment – the purchaser acquires only a right to a certain percentage of each payment, with the balance to the original recipient

Legal Procedures Necessary for Sale

Most states have laws that regulate the purchase of the right to structured settlement payments. These laws commonly require, among other things, specific, written disclosures regarding the transaction, such as fees, commissions, and discount rates, and also require court approval prior to the actual sale.

Federal Regulation of Structured Settlements Purchases

As part of the “Victims of Terrorism Relief Act of 2001,” the United States Congress enacted a law applicable to the sale of structured settlements (the Act). The Act requires that all sales, assignments, transfers, or encumbrances (i.e., borrowing money secured by the settlement payments) of structured settlements be approved by a state court. The Act does not mandate the procedure, but requires states to evaluate whether the sale is in the best interests of the seller, taking into account the welfare and support of the seller’s dependents, and violates no federal or state law or court order.

Once the court has determined that the sale qualifies, it must issue a “qualified order” approving the transfer or sale. – In addition, a “model act” intended to regulate such sales, has been adopted by most states.

Effect of Failure to Comply With the Act

If the parties fail to obtain a “qualified order,” the Act imposes on “any person who acquires directly or indirectly structured settlement payment rights in a structured settlement factoring transaction a tax equal to 40 percent of the factoring discount.” The “factoring discount” is an amount equal to the difference between:

  • The gross total, undiscounted sum of the payments purchased minus
  • The total amount actually paid by the purchaser
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