State of Pennsylvania Clarifies Terms In Structured Settlement Protection Act
by: Jason Rigler
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The state of Pennsylvania created a protection act for the selling of structured settlements in 2001; this was done to ensure that both parties understand all the terms and are protected before any such transactions occur. The General Assembly of the commonwealth of Pennsylvania named this act the Structured Settlement Protection Act.
Definitions of Terms
Some of the terms used in the act could be contrived as tricky to understand, so the General Assembly had the terms explained within the act. These terms are explained, in detail, and cover both sides of the settlement transaction. Terms such as,” annuity issuer” to terms like “transferee” are covered in the act. Some terms even quote the rules and regulations given by the Internal Revenue Service. This will allow for full clarification for all interested parties.
Equal Rights
This act ensures that all parties have equal rights when dealing with the structured settlement. There are certain conditions that must be met before such transaction can occur. Some of the most important conditions are as follows.
The first condition states a petition must be filed requesting such a transfer. This petition must be granted (approved) by final order of a court of correct jurisdiction. This petition must have written findings that:
• The requested transfer complies with all federal and state requirements or any applicable law that limits the transfer of workers’ compensation claims.
The second condition that must be met is that no less then ten days before transfer obligation, the transferee has provided a disclosure statement to the payee, setting forth the following:
• The amounts of structured settlement payments and the dates they are due to transfer
• The aggregate amount of payments
• The discounted rate of payments and the rate or rates used to determine that amount
• The available gross amount available instead of payments
• An itemized list of all brokers’ commissions, charges, fees, other commissions, and costs payable by the payee or deductible from the gross amount otherwise payable.
• The net amount available to the payee after such deductions
• The percentage obtained by dividing the net payment by the discounted present value of payments.
• The amount of any penalty of any liquidated damages, payable by the payee in the event of any breach of transfer agreement by the payee
The third is that the payee has shown that the transfer is truly in the best interest of the payee or their dependents, and the fourth states that the payee has received or has a separate written waiver stating that they have independent legal advice regarding the implications of the transfer which include the tax ramifications of such transfer.
These are the general provisions of the PA structured settlement law. For further clarification, read the law in its full text, or talk with a settlement buyer or similar professional accustomed to working with the PA statute.
Article Source: http://www.ArticleStreet.com/profile/jason-rigler-6456.html
About the Author
Prosperity Partners provides resources for structured settlement recipients and their attorneys regarding the structured settlement laws and procedures for accelerating the payout of future payments to address immediate financial needs.
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