Texas Structured Settlement and Annuity Law
Many of those who receive regular scheduled payments from a structured settlement annuity may want to consider selling part or all of future payment rights in exchange for up-front payments. A structured settlement or annuity sale can be an appealing way to prepare for a big purchase or to pay down existing debts because, unlike a loan, a structured settlement or annuity payment does not require regular interest and principal payments in the future. Selling a structured settlement or annuity involves getting immediate cash by signing away some of the future revenue that the asset holder is due to receive.
For those considering a structured settlement or annuity sale, it helps to know a little about how the seller’s state of residence treats these transactions. Most states have structured settlement and annuity laws to help protect consumers. In the state of Texas, a 2003 law called the Structured Settlement Protection Act governs the sale of structured settlements and annuities.
Texas Structured Settlement and Annuity Law: Disclosure
One aspect of Texas structured settlement and annuity law that helps to clarify these transactions is a set of disclosure requirements. Many of these rules help the seller understand what he or she gets in return for surrendering some of the future payments. In Texas law, as with similar laws in many other states, the company buying the future payments must show the seller the estimated value of the future payments using a calculation called “discounted present value.” The financial company working with a structured settlement or annuity seller must also show:
- all applicable expenses
- the gross advance amount
- the net advance amount
- the exact amounts and due dates of future payments that are being sold
The structured settlement or annuity buyer also has to inform the seller about the “free cancellation” period of several days, when the asset holder can decide to call the deal off.
Texas Structured Settlement and Annuity Law: Court Review
Texas structured settlement and annuity law specifies how a court must review the deal to ensure it does not violate any part of the law. This includes making sure that a structured settlement or annuity sale will not make it difficult for the seller to pay alimony or child support to any dependents. The court will also look at whether the seller has been adequately informed about the deal, and whether the buyer has filed paperwork with the court.
SELL YOUR STRUCTURED SETTLEMENT OR ANNUITY WITH CBC
At CBC, we have a long history of working with clients to achieve customized structured settlement and annuity sales that help families fund their financial goals. We know how to work with state law to make sure you get your money when you need it, and our excellent customer service means you will be listened to and informed about your structured settlement or annuity sale every step of the way. Let us help you sell a structured settlement or annuity to pursue your own financial plans.
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