2019-00248779-CU-PT

In Re: Ryan Hancock

Nature of Proceeding: Petition for Approval for Transfer of Structured Settlement Payment

Filed By: Felton, James

This matter was continued to this date after oral argument from February 15, 2019.

On February 21, 2019, the petitioner filed a notice of increase in purchase price, stating that the original purchase price was $14,580.92, and JGW has agreed to increase that amount to $15,080.92. The purchase price to be paid to Ryan Hancock was calculated using a discount rate of 14.90 percent. This percentage rate is higher than the highest interest rate recently approved by the Court (6.196%, 6.01%,
11.86%, 10.51%, 6.37% and 12.84%, as noted in the tentative ruling below. Therefore this new interest rate is also rejected as excessive. Moreover, there is no factual showing for the current need for the funds that would warrant approval of such a high interest rate.

The Court would note that Mr. Hancock was present, with his mother, at the prior hearing. Mr. Hancock is an impressive young man, who wishes to join the military after his schooling (college) is complete. He presents as articulate and intelligent. His student loans are modest to date, with a modest interest rate. He is living at home; he pays rent to his parents. His mother appeared quite proud of him. He appears responsible and industrious. It would not be his best interest to pay this excessive amount to effect the transfer.

The tentative ruling for February 15, 2019 was as follows:

Petition for Approval for Transfer of Structured Settlement Payment Rights is denied, without prejudice.

Payee Hancock is a 20 year old student who is employed earning $800 a month and is

a full time student. His living situation is not detailed in the petition or declaration. He
wishes to sell a payment due in 2022 in the amount of $24,845 for a sales price of
$13,335.47. He states that he wants to use the money to pay off two $7,000 student
loans and to pay his final year of college tuition so he will not have any debt. The
proposed transfer, if it was a loan, would carry an effective interest rate of 18.9 %.

Payee has provided no information about the interest rate on the two $7,000 student loans, information which might assist the court in determining this petition.

On its face, the interest rate charged is excessive and the Court cannot find that the transfer is in the best interests of the payee. The court understands that it has approved such rates in the past; however, over the past several years, the interest rate environment has changed and the court’s perception of “reasonable” has evolved with those changes. Over the past several years, the court has approved interest rates of 6.196%, 6.01%, 11.86%, 10.51%, 6.37% and 12.84%, to name but a few examples.

The payee might explore other options for paying off his student loans and paying for his final year of college tuition. Based on the facts provided, the proposed transfer is not in the best interest of the payee, a finding the Court would be required to make were it to grant the petition. Insurance Code section 10139.5(a)(1).

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.