Basic Principles of SSPA that Affect Child Support

In the last couple of years, many divorcing parents prefer to use structured settlement as the venue to release child support. You can check the advantages of doing that here. Many parents that are left to care for the child eventually feel they need to cash out on their child’s structured settlement. Regardless of the reason for the sale, the court becomes extra protective when it comes to making court settlements involving a child. In 2010, California institutionalized an extensive list of what the court should considering when reviewing requests to sell structured settlement.

Each state has its own Structured Settlement Protection Act or SSPA. It is based on one principle but it is natural for each state to differ in the details. Let us go through the basic requirements that you will find in all SSPAs.

Present finances – the structured settlement is usually a result of a lawsuit that cause injuries or other medical condition. That being said, the court assumes that the structured settlement payments are being used to pay medical bills. If the case involves a child (whether it is child support or from a lawsuit), the court considers not just the medical needs of the child but all other opportunities he or she is supposed to enjoy such as educational needs, food, clothing, and shelter. The court sometimes even imposes provisions for what others think as a luxury such as budget for extra-curricular activities and expenses for holidays.

Current status – if the sale is to be approved, the court must make sure that the guardian of the child has a steady source of income and does not live a lifestyle that endangers his or her finances and the finances of the child. The court will look for documented proof of the guardian’s employments, salary, other sources of income (if any), and other properties.

Immediacy of the need – perhaps the most critical part of the review is determining whether the grounds for the request are valid. The court must see that the reason for cashing out the lump sum now is more important than securing the future of the child.

Full Disclosure – the court requires that the person requesting the sale provides all historical documents that are connected to the structured settlement. This includes all court decisions that resulted to the structured settlement, any previous application to transfer the rights of the structured settlement and others as may be deemed necessary by the court.

No Conflict with Past Court Order – if there are past court decisions that approved or denied request for transfer of structured settlement rights, the court must know about it.

All these are common themes in SSPA of all States.

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Related posts:

  1. Safeguarding Structured Settlements For Children and Minors
  2. California Probate Code and Structured Settlement of Minors
  3. Cash Advance for Child Safety Lawsuit
  4. Legal Considerations in Selling Structured Settlements of Children
  5. Acceptable Reasons To Sell Your Settlement Payments

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