If you receive payments from a structured settlement, you may have the option to sell some or all of those future payments for a lump sum today. It can be the right move in some situations and a costly mistake in others. Here is what to understand before you sign.
How selling a structured settlement works
A structured settlement pays you fixed amounts over time. A purchasing company buys some of those future payments at a discount, giving you cash now in exchange for less money overall. In the US, these transactions usually require court approval to confirm the sale is in your best interest.
What to look for in a reputable company
- Transparent pricing. A clear discount rate and a written quote, with no hidden fees.
- Strong reputation. Established track record and verifiable reviews.
- No pressure. Trustworthy firms give you time to consider and consult an adviser.
- Court-approval support. Help navigating the legal process required in most states.
Questions to ask before selling
- What is the effective discount rate?
- How much will I receive versus the total value of the payments I give up?
- Are there any fees beyond the discount?
- Can I sell only part of my payments instead of all?
Should you sell at all?
Because you receive less than the full value, selling makes most sense for a genuine, pressing need, not routine expenses. Consider partial sales to keep some future income, and speak with an independent financial adviser before deciding. This article is general information, not financial advice.