Publication Date



While the number of tort filings has been increasing in recent decades, the number of trials resulting from these claims has been steadily declining. Instead of sacrificing time and resources in court, parties choose settlement, frequently in the form of a structured settlement where payments are dispersed over a period of time. These structured settlements provide much-needed security for tort victims, particularly those who unable to work and are especially vulnerable to losing their settlements. But what happens when these victims find that they have expenses that they cannot cover with their deferred payments? Many tort victims wind up facing mounting medical bills, among other difficulties, and discover that the level of income from their settlements cannot meet their needs. They need greater flexibility-so they turn to factoring companies and sell their future payments for a heavily discounted lump sum of cash. What many victims do not realize is that by factoring their right to receive payments over time, they have committed themselves to uncertainty in bankruptcy. Under Georgia law, certain annuities that are used for the support of the debtor are exempted from the bankruptcy estate-a lump sum of cash sitting in their bank account, however, is ordinarily not protected. This Note suggests extending the protection granted to annuities that are meant for the support of the debtor to any money gained from factoring such an annuity, since the function of the funds does not change simply because the rights to future payments are sold.