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The case before the Supreme Court of New York County involves a significant statute that appears to have a disproportionate impact on people of color and those with a limited income.
The statute is found in the General Obligations Law of New York and is known as the Structured Settlement Protection Act. This statute requires judicial approval as a precondition to an injured plaintiff’s sale to a third party of future structured settlement payments. The main issue with this statute is that it allows a structured settlement payment to be purchased by a third party, typically for less than what the settlement is worth. This is not ideal for those that are financially stretched and need money right away as they see this as an opportunity rather than the bad deal that it may turn out to be.
Case Background
In this particular case the individual attempting to sell his settlement is a 21 year old male. In 1994, his mother entered into a structured settlement on his behalf as he was still an infant. He is to receive periodic payments through the year 2013. He is currently working as a cashier and earns $15,000 per year.
The individual is attempting to sell the lump sum payment of $50,000 due to him in May of 2008 and another lump sum payment of $69,700 due to him in May of 2013. In exchange he is to receive only $51,021.35, which is less than 55% of the current value.
Court Discussion and Decision
The court has carefully reviewed the financial situation of the individual seeking to sell his settlement payments. He states that he wants to buy a barbershop with the money. He currently does not have a job and all of the other disbursements he has received have dissipated.
The court cannot in good conscience grant this petition as it is worth far less than the current amount and is not fair to the petitioner. For this reason, the petition is denied.
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