Selling your structured settlement? Learn the pros, cons, laws by state, and how to get the best offer with our expert guide and discount rate calculator.
Selling your structured settlement is a serious decision. Whether you’re facing an emergency, debt, or seeking financial flexibility, understanding the ins and outs of the process is essential. This guide not only demystifies how to sell your structured settlement but also empowers you to make the most financially sound decision.
What Does It Mean to Sell a Structured Settlement?
Structured settlements are long-term, tax-free payments awarded through lawsuits or insurance claims. Selling your structured settlement means giving up all or part of those future payments in exchange for a lump sum now, usually through a third-party company known as a factoring company.
Example: If you are owed $1,000/month for 10 years ($120,000 total), a buyer might offer you $80,000 upfront—the difference is their profit margin.
How the Process Works (Step-by-Step)
- Get a Quote: Contact multiple buyers for offers.
- Review Discount Rate: Understand how much you’ll lose versus keeping the payments.
- Court Approval: All sales require a judge’s approval to protect your interests.
- Cooling-Off Period: Some states mandate a period to cancel the agreement.
- Receive Lump Sum: Upon approval, the company wires the money.
Compare Offers: Buyer Comparison Table
| Company | Avg. Discount Rate | Payment Speed | BBB Rating | State Licensing |
|---|---|---|---|---|
| J.G. Wentworth | 9-15% | 2-3 weeks | A+ | Nationwide |
| Peachtree | 8-14% | 2-4 weeks | A | 47 states |
| Fairfield Funding | 10-18% | 3-5 weeks | A | 45 states |
Tip: Don’t accept the first offer. Shopping around could save you thousands.
Financial Calculator: Know What You’re Losing
Use this tool to calculate the percentage you’re sacrificing by accepting a lump sum.
Legal Considerations by State
Court oversight is required in all 50 states, but the rules differ:
| State | Cooling-Off Period | Notable Rules |
| California | 10 days | Court can deny if not in your best interest |
| Maryland | 7 days | Strict review of buyer practices |
| Texas | 3 days | Attorney may be appointed by court |
Always consult an attorney familiar with local law.
Risks of Selling Your Structured Settlement
- Reduced Payout: You often give up 30-40% of your total future payments.
- Irreversible: Once approved by the court, it’s legally binding.
- Predatory Practices: Some buyers use pressure tactics or hidden fees.
“I sold mine for $75k on $120k value. The company made $45k just for waiting. Wish I asked more questions.” — Reddit user
How to Protect Yourself
- Request quotes from 3+ companies
- Check BBB ratings and licenses
- Ask about all fees and legal costs
- Understand court process timelines
- Use the cooling-off period to reflect
FAQ: Selling Structured Settlements
Q: Can I sell only a portion of my payments?
A: Yes, most companies offer partial sale options.
Q: Do I need a lawyer?
A: Not always, but it’s strongly recommended, especially in complex or large transactions.
Q: How long does the court approval take?
A: Typically 3–8 weeks, depending on your state.
Q: Are there alternatives to selling?
A: Consider personal loans or tapping into emergency assistance before selling.
Final Thoughts
Selling your structured settlement can provide fast relief, but it comes at a cost. With proper research, legal guidance, and competitive quotes, you can protect your financial future. Use tools like our calculator, consult an expert, and always prioritize your long-term well-being.