The Process of Selling Settlements
The process of selling settlement payments is streamlined, especially once you identify an experienced buyer to work with.
- Research and obtain quotes from multiple factoring companies
- Choose a credible company that has given you the best deal
- Accept the offer and complete the paperwork
- The company will arrange for a court date, so a judge can approve your structured settlement sale
- Following court approval, the order is sent to the insurance company and you’ll receive your money from the buyer.
From beginning to end, the process is typically 1-3 months, largely depending on how quickly the court hearing is scheduled.
Selling a Settlement: Is It Right For You?
There are many reasons to sell structured settlement payments. For many, they need cash to pursue goals and opportunities of a lifetime. The following are some common reasons:

Pay medical bills

Pay down high-interest debts

Pay for college education

Make a down payment on a home

Purchase a car

Start a business

Invest for retirement
As an annuitant, the decision to sell your settlement payments is very important and should be made carefully.
Your Sale Options: Full vs. Partial
If you decide to sell your lawsuit settlement, you are not required to sell all payments at once. Instead, you can sell your settlement in part or in full based on your financial needs.
Many people decide to sell only a specific number of their future payments. By doing this, they will resume receiving payments in the future. You also have the choice to sell a portion of your payments, so you continue to receive monthly payments and also get a lump sum. Lastly, you can sell the entire structured settlement annuity and receive a larger lump sum.
The choice largely depends on your financial needs and goals. A trusted structured settlement company can discuss your needs and offer the right fit for your financial goals.
Pros and Cons of Selling Settlements Payments
Benefits:
- Get a lump sum of cash instead of small amounts over the course of months or years
- Use the cash for your own financial goals, like buying a house, paying off debt, or making a major purchase
Drawbacks:
- Companies charge a discount rate, which lowers the value of your take-home cash
- The sale process takes time, often between one and three months
What is the Discount Rate?
One of the first questions people have is how much cash they will receive when they sell their settlement. This is a natural concern and is an important point to consider.
To understand how much money you’ll get, you need to understand the discount rate.
The discount rate is essentially a fee charged by the factoring company that reduces the value of the structured settlement annuity you’re selling. The average discount rate is between 9% and 18%, but it can be higher.
Once you calculate the value of your remaining payments and subtract the discount rate, you’ll know the present value of your structured settlement sale — in other words, the amount of money you’ll actually receive.
There are several factors that can impact how high the discount rate is, including:
- Number of remaining payments
- Value of payments
- Date of payments
- Market rates
- Economic factors
How to Pick the Right Buyer for Your Structured Settlement
Choosing the best buyer is a key step in selling your structured settlement. The right buyer will offer the lowest discount rate, which puts the most money in your pocket. Consider the following criteria when choosing a factoring company:
- The company should be honest, put your best interests first, and offer you different sale options to evaluate
- The company should provide you a free, no obligation quote promptly
- The company should offer you a competitive discount rate
- The company should be willing and able to answer questions throughout the process and assist with paperwork
- The company should never harass you or rush you during the process
How Taxes Work When Selling a Structured Settlement
You do not owe income tax when selling a structured settlement annuity resulting from a personal injury. If you don’t pay taxes on your monthly payments, you likely won’t pay them on the sale either.
Get The Cash You Deserve For Your Structured Settlement
FAQ
Here are some common questions and answers regarding transferring the rights of lawsuit settlements.
Get The Cash You Deserve For Your Structured Settlement
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