Court Says ‘Frequent’ Transfers Of Structured Settlement Payment Rights Is ‘Not A Good Use Of This Valuable Asset’

Court Says ‘Frequent’ Transfers Of Structured Settlement Payment Rights Is ‘Not A Good Use Of This Valuable Asset’

Posts here and here describe the New York trial court opinion in In the Matter of Settlement Funding of N.Y., LLC (Smith), 31 Misc.3d 1221(A), 2011 WL 1678399 (N.Y. Sup. Ct. May 4, 2011), that involved a payee named Kimberly Smith who entered into a proposed transfer to sell a portion of the structured settlement payments she was due to receive, less than six months after a prior transfer.New_york[1]

The court denied the request for court approval of the transfer because the transfer was not in the payee's best interests and was not fair and reasonable.

The court also noted that it did not approve of "frequent" transfers:

The court finds that the petition must be denied because it is insufficient to show that the transaction is in Ms. Smith's best interests . . . .  Frequent resort to sale of portions of the structured settlement [payments] at a deep discount is not a good use of this valuable asset . . . especially in light of the facts that the proposed transfer would initially decrease her current income by $216 per month, while the proceeds would be used to pay outstanding credit card debt (see Matter of Imperial Structured Settlements (Angelillo), 24 Misc.3d 1226[A], 2009 N.Y. Slip Op 51625[U] [use of sales proceeds to pay outstanding credit card debt are not in a payee's best interests]).

The Smith opinion is from the trial court of Cortland County, New York.

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