In the tradition of the common law, American and English courts adhered to the privity theory that dictated that only contracting parties could sue in tort or contract for personal injury. In the late 19th century, courts evolved a detached tort doctrine of negligence, imputing liability to manufacturers predicated on the universal duty of due care owed to the world as a whole, distinct from contractual obligations. Accordingly, the manufacturers’ liability can now arise in negligence without the privity of contract to all persons engaged in the contemplated use of their products. Additionally, courts assess a product’s defect by probing for elements of negligence, strict liability in tort or statute, and breach of warranty under the Uniform Commercial Code. As for failure to fulfill warranty, it only covers the purchaser and a limited class of proximate persons such as family members or invitees.

Stephen Schumer got killed while riding a motorbike; his wife instituted a lawsuit after the highway agency unearthed a defective design by the manufacturer. The cause of action broadened her horizons by incorporating the three theories ascribing liability for a defective product, viz. negligence, strict liability as codified by the Restatement (Second) of Torts, and legal responsibility for breach of warranty under the Uniform Commercial Code. To avoid the lottery of mass tort claims from other buyers, the manufacturer resorted to its insurer who settled the case with her attorney behind the scenes. Mrs. Schumer would receive compensation under what is known as a “structured settlement” touted for its tax-free stream of income. Later on, Mrs. Schumer sunk into debts worsening her credit score. Although she could not perfect the structured settlement as security for a lump –sum premium, she burbled with joy when an ad on her TV displayed J.G. Wentworth as a buyer of payment rights for quick money.

Haggling for the Highest Bid By Hook or By Crook

Although Wentworth had grabbed her attention, Mrs. Schumer shopped around for a top-dollar payout. It’s a calculated risk factoring your payment rights to structured settlement funding companies as you will only get a discounted value of the aggregate future cash flows but not the face value. She called into question the offers to unearth transfer expenses, but at last, she decided to sell to DRB Capital after finding them on Fundfirst Capital. They agreed to buy at a lump sum buyout at a price less the “face value” by a small margin.

Court Approval Lay at the Heart of Her Transaction

DRB will go the whole nine yards to satisfy statutory requirements; Mrs. Schumer received a bundle of documents that included a disclosure statement, transfer agreement, affidavit and court declaration forms. They served the annuity issuer with a notice 20 days before the hearing date. DRB also made arrangements for the hearing of the petition, pleading the case in her favor. Mrs. Schumer appeared briefly and responded to a barrage of questions from a sharp judge.

What Were the Federal Income Tax Implications of Selling Her Structured Settlement Payments?

While the sale of a structured settlement annuity may bring forth profound federal tax ramifications, in her scenario, the transfer has minimal impact. The proceeds of personal injury for medical expenses, property damage or pain and suffering fall outside taxable income. But personal injury awards that compensate the plaintiff for lost wages are taxable, and Worker’s Compensation Acts bar the sale of such proceeds. Nevertheless, if you sell your structured settlement for a sizable amount of cash, your duty-free income will be exposed to the tax man’s ax as you propel to the upper-tax-bracket and a ballooning tax bill that may be swept under the carpet until the following year.

Renowned Structured Settlement Companies

DRB Capital has entrenched toehold as a lucrative buyer of structured settlements at a premium lump sum. The company has familiarity with federal and state laws, consumer rights, and technical requirements of the deal.

JG Wentworth allows you to cash in your structured settlement with a lump sum premium payout with a personal representative as your safe pair of hands. They file a court petition and comply with statutory provisions to obtain judge sanction for the transfer.

Peachtree Financial Solutions provides lump sum payment for payees and tailors a Plain English agreement with a fair and consumer-friendly price offer.…

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