My name is Mike Green. I am outside counsel to several factoring companies. This is my first time posting to a blog so, please, be gentle.
Anyway, to follow up on Matt Bracy’s previous post about court approval, I thought I’d give my “outside counsel” perspective about court approval, what happens and how everyone can be prepared to face the judge at the hearing and what everyone can do to best present the transfer.
In most states (including PA and NJ, where I practice), an individual must appear in court and persuade the judge that the proposed transfer is in that individual’s best interests.
While I can’t comment on procedures in each state, I can try to address generally what will happen. As the title of this post suggests, it’s important to be prepared for a structured settlement hearing.
Prior to the hearing, a document will have been filed with the court. It will vary by name from state to state but will likely set forth the terms of the agreement and it may attach the sale agreement between the parties and the Disclosure Statement as exhibits.
After filing, the matter is generally assigned to a judge. Judges’ procedures often vary widely. Some judges schedule each structured settlement transfer hearing they receive separately. Some judges schedule all structured settlement transfers on the same date and time. Some judges lump these transactions in with a variety of other matters and tell everyone to get there at the same time. Some judges run on time. Some do not. It is often difficult to know how matters will proceed until everyone is in the courtroom.
I generally like to meet with my clients’ customers outside the assigned courtroom about a half hour before the scheduled hearing. We go over the paperwork, address any issues which may have come up and prepare for the questions that I or the judge will ask at the hearing.
Sometimes people will ask me “What do I say?” or “What do I need to tell the judge to get this approved?”
First, there’s no magic thing to say (other than the truth, of course).
Second, it’s important to remember that the judge is king (or queen) in these transactions. One way to help persuade the judge is to be prepared – if you intend to use a lump sum to pay off higher interest credit card bills, bring them to court. If you intend to use the lump sum as a down payment on a house and you are pre-approved assuming you get the lump sum, bring that documentation. If you have other needs or if you have other circumstances which might appear odd to the judge, be ready to address them.
Judges differ in their approach to hearing the transfers. Some judges ask questions. Some judges have the attorneys ask questions. Some judges permit the attorney and the individual seeking to make the transfer to sit at the same table. Some do not. Some judges require the individual to give testimony from the witness chair. Some do not.
That said, while there are many differences between judges and their procedures at these hearings, certain things remain the same. Judges take their responsibilities seriously. While you may not think that a judge should be able to stop a grown man or woman from entering an arms length financial transaction with someone else, state legislatures around the country have required that a judge approve the transfer of any structured settlement payment rights. Since that is the law, people who are serious about entering into these transactions and who want these transfers approved should act accordingly. Judges are much more likely to approve structured settlement transfers when they see that the law’s requirements have been met and the seller is prepared and serious about the transaction.
