A structured settlement provides tax-free periodic payments, but you can sell some or all of your future payments for a lump sum of cash. This guide covers top structured settlement buyers, how much you'll receive, and what to consider before selling.
Structured Settlement Quick Facts
- Discount rate: 9% - 18% (you receive less than total value)
- Timeline: 45-90 days to receive cash
- Court approval: Required in most states
- Tax implications: Lump sum typically tax-free
- Partial sales: Sell some payments, keep others
Top Structured Settlement Buying Companies
| Company | Years in Business | BBB Rating | Best For | Rating |
|---|---|---|---|---|
| J.G. Wentworth | 30+ years | A+ | Largest buyer, name recognition | |
| Peachtree Financial | 25+ years | A+ | Competitive rates | |
| Fairfield Funding | 15+ years | A | Customer service | |
| Strategic Capital | 20+ years | A+ | Complex cases | |
| SenecaOne | 15+ years | A | Flexible options |
How Structured Settlement Sales Work
- Get quotes: Contact multiple companies for offers
- Review terms: Compare discount rates and fees
- Accept offer: Sign purchase agreement
- Court approval: Petition filed, hearing scheduled (required by law)
- Judge review: Court ensures sale is in your best interest
- Receive funds: Cash deposited after approval (typically 45-90 days)
Understanding Discount Rates
What Is a Discount Rate?
The discount rate is how much less you receive compared to the total future value of your payments. Example:
- Future payments value: $100,000
- Discount rate: 12%
- You receive: Approximately $70,000 - $80,000
Factors affecting your rate: Payment schedule, total value, how far in the future, your state, current interest rates.
Types of Payments You Can Sell
- Personal injury settlements: Most common type
- Workers' compensation: Structured workers' comp payments
- Lottery winnings: Annuity lottery payments
- Annuities: Fixed annuity payments
- Wrongful death: Survivor structured settlements
- Insurance settlements: Various insurance payouts
Selling Options
| Option | Description | Best For |
|---|---|---|
| Full Sale | Sell all remaining payments | Large immediate cash need |
| Partial Sale | Sell some payments, keep others | Balance cash now + future income |
| Lump Sum Portion | Sell portion of each payment | Reduce payments but keep income stream |
| Specific Payments | Sell certain years only | Target specific financial goals |
Pros and Cons of Selling
Advantages
- Immediate cash: Access money when you need it
- Flexibility: Use for any purpose (debt, home, education)
- Tax-free: Lump sum from injury settlement typically tax-free
- Investment opportunity: Potentially earn more investing lump sum
- Emergency needs: Handle medical bills, job loss, etc.
Disadvantages
- Less money: Receive less than total future value
- Lost security: No more guaranteed income
- Fees: Legal and processing fees
- Time: Court approval takes 45-90 days
- Irreversible: Can't undo the sale
When Selling Makes Sense
- Medical emergency: Large unexpected healthcare costs
- Debt consolidation: High-interest debt costing more than discount rate
- Home purchase: Down payment or avoiding PMI
- Education: Pay for college/trade school
- Business start: Capital for business opportunity
- Avoiding foreclosure: Save your home
Tips for Getting the Best Deal
- Get multiple quotes: Compare at least 3-5 companies
- Understand all fees: Ask for complete cost breakdown
- Don't rush: Take time to evaluate options
- Consider partial sale: Keep some future income
- Consult advisor: Financial advisor or attorney review
- Check BBB ratings: Research company reputation
Court Approval Process
What Happens in Court
Federal and state laws require court approval to protect you. The judge will evaluate:
- Is the sale in your best interest?
- Are you fully informed of the terms?
- Have you considered alternatives?
- Will you have adequate means of support?
- Did you get independent advice?
FAQ
How much of my settlement value will I receive?
Typically 60-80% of the present value, depending on discount rate, payment schedule, and market conditions.
Can I sell if I'm receiving payments for a minor?
Courts apply extra scrutiny to protect minors. A guardian ad litem may be appointed to review the sale.
What if I change my mind after accepting an offer?
You can typically cancel before court approval. After court approval, the sale is final.
Will selling affect my government benefits?
Possibly. A lump sum could affect Medicaid, SSI, or other means-tested benefits. Consult a benefits advisor.