(a) If, at any time after entry of judgment, a judgment creditor or successor in interest can establish that the continued payment of the judgment in periodic installments will impose a hardship, the court may, in its discretion, order that the remaining payments or a portion thereof shall be made to the judgment creditor in a lump sum. The court shall, before entering such an order, find that: (i) unanticipated and substantial medical, dental or other health needs have arisen that warrant the payment of the remaining payments, or a portion thereof, in a lump sum; (ii) ordering such a lump sum payment would not impose an unreasonable financial burden on the judgment debtor or debtors; (iii) ordering such a lump sum payment will accommodate the future medical, dental and other health needs of the judgment creditor; and (iv) ordering such a lump sum payment would further the interests of justice.
§ 5046.Adjustment of payments.
Article 50-B. Periodic Payment of Judgments in Personal Injury, Injury to Property and Wrongful Death Actions · Last amended 2011 · Last verified July 21, 2026
In one sentenceCPLR 5046 lets a court convert remaining periodic payments into a lump sum on a hardship showing, but only after finding unanticipated medical needs, no unreasonable burden on the debtor, that the payment meets those needs, and that justice requires it.
Full Text of CPLR 5046
(b) If a lump sum payment is ordered by the court, such lump sum shall be calculated on the basis of the present value of remaining periodic payments, or portions thereof, that are converted into a lump sum payment. Unless specifically waived by all parties, the annuity contract executed pursuant to section five thousand forty-two of this article shall contain a provision authorizing such a lump sum payment if such payment is approved pursuant to this section. The remaining future periodic payments, if any, shall be reduced accordingly. For the purposes of this section, present value shall be calculated based on the interest rate and mortality assumptions at the time such a lump sum payment is made as determined by the insurer who has provided the annuity contract, in accordance with regulations issued by the superintendent of financial services.
Plain-English Summary
Periodic payments protect creditors from squandering a large recovery, but rigid installments can turn into a trap when circumstances change. This section gives judgment creditors an escape valve. If continuing the periodic schedule would work a hardship, the court can order the remaining payments, or part of them, paid as a lump sum instead.
The court can't do that on a bare request. It has to find, before ordering the lump sum, that unanticipated and substantial medical, dental, or other health needs have come up; that paying the lump sum won't put an unreasonable financial burden on the debtor; that the lump sum will address those future health needs; and that ordering it serves the interests of justice. All four findings have to hold.
Once ordered, the lump sum gets calculated at present value, using the interest rate and mortality assumptions the annuity insurer applies at the time of payment under the superintendent of financial services' regulations. The annuity contract issued under CPLR 5042 has to include a provision allowing this kind of lump-sum conversion, unless every party specifically waives it.
Frequently Asked Questions
Can a judgment creditor cash out future structured payments early in New York?
Yes, with court approval, on a showing that continuing periodic payments would cause hardship tied to unanticipated medical needs.
What must a court find before ordering a lump-sum hardship payout?
Four things: unanticipated substantial health needs have arisen, the lump sum won't unreasonably burden the debtor, it will address the creditor's future health needs, and it serves the interests of justice.
How is the lump sum calculated under CPLR 5046?
At present value, using the interest rate and mortality assumptions the insurer applies at the time of payment, under regulations from the superintendent of financial services.
Can the annuity contract waive this hardship option?
Yes, but only if every party specifically waives it — otherwise the annuity contract issued under CPLR 5042 must include a provision allowing a lump-sum conversion approved under this section.
Does an adjustment under this section reduce the creditor's remaining future payments?
Yes. Whatever portion is converted to a lump sum comes out of the remaining periodic payments, which are reduced accordingly.
Amendment History
Add, L 1986, ch 682, § 9, eff July 30, 1986; amd, L 2011, ch 62, § 104 (Part A), eff Oct 3, 2011.
Source & verification. Provision text, History, and Advisory
Committee Notes are reproduced verbatim from the Consolidated Laws of New York.
Last verified July 21, 2026.
· Official source
Also known as: hardship lump sum structured judgmentcash out periodic payments New Yorkadjustment of payments 50-Bunanticipated medical needs lump sumstructured settlement hardship conversion