Part 6 – Prior Transactions

Previously, we talked about the preparation of the affidavit for court and the importance it has on judicial approval. One thing not mentioned in that particular blog has to do with information pertaining to prior transactions of the customer. Recently, judges have started to ask more questions on what has transpired between the issuance of the annuity policy and the current transaction. Judges are looking to see if the customer has previously sold any portion of their annuity payments, when the transaction took place, and what the customers did with the money.

Two factors that have been mentioned in court by Judges are (1) that Judges want to be able to make an informed decision. Judges do not want any party misrepresenting to the Court the true financial situation of the customer, and (2) any existing potentially harmful habits of the customer that may be less then desirable. In fact, some judges have implied that the failure to present this information to the court is considered a fraud on the court, and could be punished by contempt charges, a denied court order, and possible stronger sanctions against the factoring company.

This is obviously a very serious issue and one that should not be taken lightly. It is imperative to obtain as much information on prior transactions as possible. Information like what payments were sold, for how much, and what was the money used for. As much detail as possible is needed in order to present a total financial picture of the customer to the judge. Only then can the judge make an informed decision about whether the current transaction is in the customers “best interest”.

Stay tuned for next week’s blog on filing of the court action and waiting for the court date. We are almost home on the completion of a structured settlement transaction.

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