Category : IPA
By AFG Newswire Nov.30, 2014 12:46 p.m. Block 15.5 Article 2.3 Transfers of Structured Settlement Payment Rights
Part 12 California Residents: What the Transfer Company Can’t Make You Do
They Can’t Make You Enter Into a Security Interest Agreement that Exceeds the Actual Dollar Amount of Your Transfer.
- 10138(a)(11) “A provision that provides the transferee (any person receiving structured settlement payment rights resulting from a transfer) with a security interest or collateral interest in any structured settlement payment rights that exceed the actual dollar amount of the structured settlement payment rights being transferred.”
The transfer company wants to know you’ll make good on your obligation, so they attach a “security interest”. This practice happened a lot between 1988-2002 when transfers weren’t ordered to go through the Court Process. During this time period, security interests amounts got out of hand, and exceeded the transfer amount, leaving the consumer penniless, and unable to sue the transfer company because of other indemnification, hold harmless, and defend clauses in the transfer agreement.
Now, §10138(a)(11) still stands, and security interests can still occur in California, however they cannot exceed the amount of the transfer itself.
Some states, like Virginia do not allow security interests at all. Concerned about how much the security interest could be? Contact an independent professional adviser right away. Not just any attorney, or tax person. Contact a professional well versed in this industry. They are here to help.