§ 5038.Assignment of periodic installments.

A plaintiff receiving future damages through a stream of periodic payments might be tempted, or pressured, to sign that income stream away for a discounted upfront sum. CPLR 5038 limits how far that kind of assignment can go. An assignment, or an agreement to assign, the right to periodic installments for future damages under an Article 50-A judgment is enforceable only as to specific categories of amounts, not as a blanket transfer of the whole payment stream.

Those categories are narrow and purposeful. An assignment is enforceable to secure alimony, maintenance, or child support obligations, recognizing that family support claims should be able to reach this income. It's also enforceable for the cost of products, services, or accommodations, provided or to be provided by the assignee, for medical, dental, or other health care, keeping the assignment tethered to the plaintiff's own care needs. And it's enforceable for attorney's fees and other litigation expenses incurred in securing the judgment itself, covering the costs of the case that produced the payment stream.

Outside those three categories, an assignment of the periodic-installment right isn't enforceable, which protects the structured judgment's purpose: making sure future damages fund the plaintiff's future needs rather than getting sold off for a lump sum to a third party with no direct stake in the plaintiff's care or support.