Can I Sell Part of My Structured Settlement?

Selling a portion of your structured settlement payments might be a great way to get a lump sum for unexpected expenses, like urgent home renovations or large medical bills.

At times, people refer to these as structured settlement buyouts. However, this phrase is essentially indicating you are selling the rights to some or all of your future annuity payments in exchange for a lump sum.

The experts at We Pay More Funding say it’s best to look for comprehensive explanations of the entire process for selling a structured settlement to know what to expect at each step of the way.

How a Structured Settlement Works

When structured settlements are agreed upon or ordered, the at-fault parties will typically put the cash into an annuity. An annuity refers to financial products that secure plaintiffs' payments from insurance companies. Using annuities to pay out settlement payments over time is a practice that has been used for years. For some folks though, they don’t make sense as time goes, and financial needs arise.

Key Considerations

If you want to “sell my structured settlement,” it is recommended that you enlist the help of trusted financial advisors or attorneys with experience in the secondary market. They can help you look for a reliable factoring company with a history of abiding by the best interests of their customers.

The terms of settlement and the laws within your state may determine if you can sell your structured settlement payment. Laws that fall under the Structured Settlement Protection Acts are there to protect recipients from unethical structured settlement buyers. The court will want to ensure the sale improves your wellbeing among other things.

Choosing to Sell Payments

Reports from the National Association of Settlement Purchasers show that many holders of structured settlements don’t sell their payments. The same reports also show that no more than 20% complete such transactions.

People who successfully complete transactions will not have as much or any payments at all to depend on for their income as they will have sold those payments. So if an individual decides the long term income is more important that the fast lump sum from selling the future payments they should not sell.

Most individuals who sell their structured settlement payments only sell a portion of payments. For instance, you may receive $6,000 per month and choose to sell only $1,500 of every payment for the next three years.

It is worth noting that you won’t get the same amount of cash selling structured settlement payments as you would have received if you continued receiving payments over time. This is because, among other things, factoring companies have administrative and legal expenses to cover as well as their margin.

One benefit of a partial buyout for sellers is that they will be able to retain part of the future payments they get instead of selling them completely. In general, partial buyouts are recommended if you are not looking to sell the whole annuity payment.

Concluding Remarks

The decision to sell structured settlement payments is a major financial decision, and it shouldn’t be taken lightly. However, it can be necessary considering the uncertainties everyone faces in life. Should such a decision come to mind, compare the different options and get sound advice from experts.