The forty-seventh state structured settlement protection act goes into effect Saturday, August 1, 2009. That's when the North Dakota Structured Settlement Protection Act becomes effective. The North Dakota SSPA is available here.
Prior posts have referred to protection acts, and the fact that such laws have been enacted in most states. Only New Hampshire, Vermont and Wisconsin are without protection acts.
The acts provide statutory protections for individuals who are entitled to receive payments under structured settlement arrangements and who are considering a transaction whereby they would sell their payment rights to a secondary market company, or factoring company.
The 47 protection acts are based on model legislation that the National Structured Settlement Trade Association (NSSTA) was instrumental in developing. A majority of the current protection acts are based on that model, while some are based on earlier models.
Protection act terms may differ from state to state, but have some common components. All of them require some kind of pre-transaction disclosure to the payee, all of them require a court proceeding, and all of them provide that a transfer is not effective unless it is approved by a court.
Additional posts concerning court decisions involving protection acts are here, here, here and here.
