Budget Cuts Impact California Structured Settlement Sales by Slowing Courts

California structured settlement sales are taking longer than ever before, thanks to budget cuts. In 2009, the United States confronted the most severe economic downturn since the Great Depression. As a result, most states faced budget gaps of unprecedented proportions. In 2010, California made a difficult, but necessary, decision to close a $60 billion budget deficit in order to prevent a major fiscal crisis. In order to balance the budget California has had to adopt reforms in every area of government as they strive to cut costs.

One of the significant state general fund adjustments was the reduction to trial court operations which resulted in a total of $100 million in budget reductions to the court system.

These cutbacks have led to a backlog of court cases which can lengthen the time that it takes in getting court approval and gaining access to their cash for those seeking to sell their California structured settlement.
Backlogs Abound
These severe budget cutbacks have had a negative impact on the timing of court hearing dates. Courts in various counties have resorted to a range of cost cutting measures, for instance, mandatory court closures, leave of absence days without pay, staff reductions and increased workloads. Consequently, court rooms are backlogged, and the number of cases that need to be processed per day has increased drastically. This backlog affects all court hearings, including hearings for California structured settlement transfers.
Hearing Dates Once the Documents have been Filed and Processed
In the past, in California one could simply request a date for a hearing and the court would assign the date requested. However, ever since the budget cutbacks, hearing dates have become a matter of “when” the first available date is. In some counties, like Los Angeles, the first available date could be up to 90 days away.
Prior to the 2010 budget cutbacks, the average turnaround time for document filing, processing and assigning of hearing dates, was between seven and ten business days. Currently, though, as a result of staff reductions, and varying from county to county, it may take anywhere from four weeks to three months to even obtain a court date. These times vary from county to county because certain counties have a greater budget deficit than others.
Other Areas May Be Similarly Affected
It is not only California structured settlement sales facing this court load problem. State courts across the country are struggling to deal with the consequences of the Great Recession and this often results in budget cuts to various parts of the court system. In fact, in 2011, 40 states experienced some level of budget cuts to their state court system, New York and Florida among the most notable to experience budget cuts. Even California had to cut another $150 million from their court system, again, in 2010. There is no way of knowing how long these cuts could last. Thus, we can only hope that soon there will be new effective solutions for the backlogged court system.


Published : April 22, 2013

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