Selling Settlement- How to Sell Structured Settlement 2023

Selling Settlement
Selling Settlement

 Although it might take some time and involves going to court, selling a structured settlement is easier than it sounds. With trusted advisors to guide you through the process, you can be sure you’re making the right decision and protect yourself from the unscrupulous  buyer.

Selling all or a portion of your future structured settlement payment may be the best way for you to obtain a mass sum of money for an unexpected expense, such as a large medical bill or urgent home issues like renovation.

Sometimes this transaction is referred to as a structured settlement loan, But that phrase is actually inaccurate as there is no such thing as a structured settlement loan. 

 Current laws prohibit structured settlements from being used as collateral for loans.

Are you interested in selling all parts of your structured settlement payments?

Well if that is the case, we have provided a comprehensive explanation of the process of selling your structured settlement so that you would know what to expect each step of the way. You might also be interested in reading our guide on How To Buy A House At Auction Without Cash: Real Estate Investing Guide.

How to sell structured settlement 2023 step-by-step

Step 1: evaluate your needs

 Decide how much money you need and how much of your structured settlement you want to sell. Keep in mind that the total dollar amount of the payment that you would receive over time would be higher than the amount you would get from a company that purchases the rights to the payment, and that’s because the company would have administrative and legal costs. The company also exists to make a profit.

 The lump-sum you receive from the buyer or company can be as low as 50% of your total future payment, but typically it will be between 60% and 80%. So if you get $1,000 a month, and go through your structured settlement you could sell each payment for any amount from $500 to $800.

With that in mind, consider the amount of money you are willing to sacrifice and for how long. Most people really don’t sell their entire structured settlement; instead, they sell a portion of their payments, leaving them with no income stream from their structured settlement during that period of time.

They might sell half of their payments for a year because they might want to continue receiving regularly structured payments during those six months.

The percentage and length of time are totally up to you, you would have to carefully evaluate your financial situation and consider what would be best for you.

 Using the example of $1,000 monthly payments you can select to sell six months of your payments or $6,000, in that case, you would not receive any money from structured settlements for those six months. And then after that time is up, you would once again begin to receive $1000 a month, that agreement could bring a lump sum of any amount from $3000 to $4800, it totally depends on the offer.

Step 2: Get Quotes

 Contact the company that would make the purchase-known as a factoring company- for a quote. This would tell you how much the company would pay for your payments.

It is always a good idea to get more than one quote from different purchasing companies so you can be confident you’ve chosen the right factoring company. And it is also a good idea to check out the ratings for the companies from the Better Business Bureau. 

Note: make sure each offer includes writing all the fees and commission the companies would require you to pay. It is best to get into any transaction with your eyes open.

After contacting companies and getting quotes, you’ll have a better idea of how much you can get for your payments. Now you have this knowledge you may want to revisit step one to get a better understanding.

Step 3: Process your options      

Read all the fine prints and know the terms of any deal before agreeing to it. Make sure all your questions are answered and that you are comfortable working with the company you chose. If you are not so sure about your choice, ask someone you trust to help you weigh your options. Please don’t be too shy to ask questions. Investigate the factoring companies until you are satisfied that they are reputable. Review their websites, talk with their representatives and look at the professional organizations to which they belong. Once you are done with your research, decide which one works best for you.

Step 4: Select the company

(choose the best offer and complete and sign the paperwork). The required paperwork includes;

  • Two forms of identification.
  • A completed application.
  • Copy of the original structured document and release agreement.
  • Copy of your annuity policy.

Once this step is completed, you’ve officially agreed to sell your payments.

Step 5: Request an advance

If you are in need of money, you can ask for a cash advance. This will be a partial payment of about $1000 to hold you until the process is complete. It can take up to 3 months to receive your lump sum of payment. 

Step 6: Appear before a judge

(Get court approval): this sounds intimidating but it’s not. The factoring company you are working with will make all the arrangements and prepare the paperwork for you to appear before a judge in your county.

You would have to answer some questions to prove to the judge that the transaction is in your best interest. This step is required by the law, among other things, the judge will consider the welfare and support of your departments when deciding whether to approve the sale.

After the court has approved your transaction you will send a copy of the order to the administrator of your structured settlements.

Step 7: Get your money

Receive full payment, as specified in your agreement with the factoring company. This will typically happen within the period of three to five business days of the court’s approval.

 If you owe past-due child support or have any outstanding tax, they would be subtracted, then they would be subtracted from your lump sum before you can receive the money,

Selling Structured Settlement Payments

Structured settlements are carefully regulated through federal and state laws but this strict regulation should not be viewed as evidence that selling your structured settlement would negatively impact your finances. On the contrary, the ability to obtain a huge sum of cash by transferring your payment right can help you to achieve financial goals that would be out of your reach

Note:  selling your future payment can prepare you better for whatever financial situation comes up in your life.

How much is my structured settlement worth?

Your structured settlement is actually worth the present value of your contract, but you will likely not receive that amount when you sell your payments. The factoring company would calculate the present value using a formula that would take the future value of your payments – because the company won’t receive the money until some date in the future, and subtracts the growth potential, the company will lose by not having the money at hand to invest immediately. 

With this formula, the company calculates the “discount rate”. The discount rate is the percentage factoring companies charge to account for the inherent risk associated with money that they would receive in the future. The discount rate typically falls between 9 per cent and 18 per cent.

You can also get an estimate from a structured settlement calculator, but also have it in mind that no calculator can account for the detailed terms of your contract. Use the estimate as a beginning point and expect the quotes to vary among the purchasing companies.

Benefits Of Selling My Structured Settlement 

In a word, the benefit of selling your structured settlement is liquidity. While structured settlement offers financial security over many years, sometimes people run into situations that require a lump sum of cash immediately, and when that happens, the ability to sell your structured settlement becomes a life saver (literally sometimes).

How Long Does It Take To Sell A Structured Settlement?

Structured settlement payments often take 45 to 90 days to sell. Some states require sellers to have a third-party specialist evaluate the transaction, while others allow for a “cooling period” during which you can change your mind about the sale.


If you’ve encountered a need for more money than your periodic payments can provide at once, the benefit of selling a portion of your settlement is the lump sum of cash that can not only allow you to address the expense, but it can also give you peace of mind.

Frequently Asked Questions

What is a structured settlement?

structured settlements are periodic payments made to a plaintiff who wins or settles an injury lawsuit. Instead of receiving a lump sum of money for damages, the injured party can receive a series of payments made over time.

How many settlements are in the fallout?

There are 29 settlement locations at the base of Fallout 4. Visit them on your own to receive quests directly from inhabitants.

Are settlements taxable?

settlement money and damages collected from a lawsuit are considered income, which means the IRS will tax that money. However, personal injury settlements are an exception(most notably: car accident settlements and slip and fall settlements are nontaxable).

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