H.R. 2884 -a bill titled "Victims of Terrorism Tax Relief Act of 2001" that President Bush signed into law on January 22,2002 -now provides 100% tax exemption for the recipients who must sell their structured settlement payments to address unanticipated financial needs.

As we have detailed elsewhere in a document titled Will I be taxed if I have to sell my structured settlement due to hardship?, this bill does require the recipients to conclusively demonstrate to the court that they are indeed faced with significant unanticipated hardships that would justify them to consider trading off their periodic payments revenue stream in lieu of a lump sum payment.

Structured Settlement Protection Act was enacted to discourage structured settlement payments factoring transactions trade. It was introduced to protect structured settlements and the injured victims from the problems caused by a growing trade commonly known as structured settlement factoring.

By imposing a stringent excise tax on persons who acquire structured settlement payments in factoring transactions, the Congress was trying to curb the structured settlement transactions trade that was (generally) being perceived to be against the very legislative intent that created structured settlements in the first place.

Purchases of structured settlement payments by factoring companies was not only considered to be directly subverting the Congressional policy underlying structured settlements, it was generally being believed that those transactions were not in the best interest of most injured persons.