Plaintiff Gets Inundated With Factoring Solicitation Calls on Settlement Subject to Confidentiality Agreement
By John Darer
I spoke to a structured settlement recipient this morning who tells me that she was inundated with solicitations from factoring companiesdespite her settlement, including the structured settlement, being subject to a confidentiality agreement. Her settlement emanated from a Texas 468B Trust. The solicitations began within one week of her settlement in 1997 and continue to this day. The factoring companies are even calling the tort victim's grandma in an aggressive effort to get to the the victim and to get her to part with her money.
The subsequent sale of structured settlement payment rights may have result in the distribution of a tort victims' confidential personal identifiable information if safeguards are not put in place.
SSPA Non-Contravention Standards State courts play an important "gatekeeper" role for structured settlement factoring transactions. IRC section 5891 imposes a 40 percent federal excise tax if a factoring transaction does not receive required state court approval...
Taxation of Confidentiality Agreements An issue has arisen in recent years about the taxability of personal injury settlements when a confidentiality agreement is reached. Generally, such settlements are not taxable pursuant to IRS section 104(a)(2)...