Litigation

It is good to see that New York judges are doing their part to enforce the Structured Settlement Protection Act.  The "enforcement" award goes to Judge Norma Ruiz who prevented  a deal from going to Peachtree Settlement Funding that had an effective discount rate of 17.957% (after taking into account all fees)

In the comprehensive write up that was included with her decision, Judge Ruiz said

?Apparently, there is a growing proliferation of late night and cable television commercials by factoring companies promoting these transfers, utilizing catchwords such as ?It?s your money and you should have it now?. These commercials leave desperate viewers with the purposeful impression that they will actually receive up-front, dollar-for-dollar exchanges as soon as they apply. Such disingenuous marketing serves to promote the financial gain of these factoring companies while undermining the integrity and legitimate purpose of structured settlements. Payees . . . discover after they?ve applied for these transfers, that the illusion of receiving all of their money up-front, rather than later, is not the reality.? 

-Norma Ruiz, New York Supreme Court Judge, Bronx County  The Matter Of The Petition Of Settlement Funding Of New York, LLC v. Hartford Comprehensive Employee Ben. Svc. Co. (Melissa Feliciano), Index No. 260551/2009, Supreme Court, Bronx County, N.Y. (N.Y. Sup. Ct. May 26, 2010)

Judge Ruiz' write up highlights the difficulty for unsophisticated persons in understanding the financial aspects of the transaction, particularly the cost of money compared to other alternatives. In her commentary Judge Ruiz discusses the statutory discount rate, the gross discount rate of 14.99% and then correctly recognizes that the 14.99% is not a real number since costs must be added. For this reason 4structures.com, LLC offers a free  structured settlement factoring transaction discount rate calculator right here on the Structured Settlements 4Real. You can access it from the left column section entitled "Useful Calculators"

Judge Ruiz also stated in her decision that there are many free services of which debtors can avail themselves.

Judicial review and approval is required on structured settlement transfers.  Under Federal law the absence of such approval would render the purchaser liable for a 40% excise tax on the factoring discount.

Download Judge Ruiz decision re Feliciano Factoring matter involving Peachtree Settlement Funding

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