I Want To Sell My Structured Settlement Payments - What Can I Expect?

This is quite a common practice as payees anticipating future payments of a structured settlement from an injury claim, an annuity, or a lottery win, turn to their valuable asset to trade in later payments for a lump sum payout when dependent of liquid cash at the moment.

It is not an easy decision to make when I am a recipient of a guaranteed stream of future payment installments and the need emerges to sell my structure settlement payment rights to other parties in exchange for cash that could much more easily get dissipated, and this for a fraction of my payment values in the future.

Knowing that in selling my payments I'm actually liquidating an important source of financial support that will not be regained in the future, the prospect of doing so may be daunting and accompanied by feelings of uncertainty, nervousness and confusion. There are question to be asked and decisions to be made.

Some years ago I have been badly injured in an auto accident and we did a structured settlement in which the defendant's insurance agreed to transfer liabilities to an annuity issuer who is sending out the periodic payments of the recovery claim.

However, I'm now considering to sell my structured settlement payments or some of them, to afford buying a new vehicle for my business. I wold need the money pretty soon. My question is: can I get money from my structured settlement now?

It is a widespread and common misconception that you can get cash "now." You may be able to sell your payments of a structured settlement annuity in exchange for a lumpsum in the short term, but to receive your cash will take a minimum of between one month (unlikely) and at least two months since there's a process to go through and court hearing that must take place to approve the assignment of your payment rights. Some buying companies may offer a cash advance that may typically amount to something like $500 or $1,000 dollars at the time of agreeing to do the sale. However, that is usually only a fraction of what you expect to get in the sale that will more than a week or even a month or more to accomplish.

If I want to sell my structured settlement payments from a personal injury lawsuit raising cash for current use, do I have to sell the rights for the whole structured settlement plan, or I can sell just some of my payments while keeping other payments still to myself?

You can sell all your payments, or just some of your payments, whichever works for your purpose. It may actually be a good idea, depending on your specific needs, to sell just some of your payments at once, so that you obtain some cash now for the short term while keeping the rights to receive the remainder of your payments retaining a much valued source of living support. You can at a later time sell more of your payments if the need arises.

It is up to you to choose how to sell your payments, i.e. which of your payments to sell. For example, you may decide to sell deferred payments while retaining more immediate payments to yourself, or vice versa. Keep in mind that you are likely to get less money for selling payments that are to be received later in the future.

What if I want to split a payment and sell only part of a large lump sum payment that is part of my settlement payments structure, or alternatively to divide a range of payments and sell only a portion of each of those payments? Is it possible to sell partial payments, or I have to sell the payments in their entirety?

Technically, it is possible to split payments and sell only portions of the payments that you select to transfer. However, this is dependent on the consent and agreement of the structured settlement obligor, the company that is obligated to send out your periodic payments.

Oftentimes, structured settlement companies and annuity issuers are not overly enthusiastic to transfer payments, the less so to part payments and add liabilities to an additional party. By selling portions of payments, the annuity owner becomes committed to send out two separate payments instead of one at a given period; a portion of the payment to you, and the remainder to the buyer -- something the company may resist, and the law may be on their side, depending on the state's structured settlement protection act.

Another option is to sell the whole payments to a factoring company who will buy a portion of the payments to keep to themselves and remit the untransferred remaining portion to you. Read more about Split Payments here, and about Servicing here.

How much is my structured settlement worth? How much can I get from my structured settlement when selling payments?

There are no fixed numbers, and amounts will vary not only based on your specific settlement, the type of structured settlement, the amount of your future payments, time of payout and more, but you may also get various quotes offered by different structured settlement buying companies for selling your payments. A  discount rate between 8% and 12% is common, but there are hardly any regulated standards, and some buyers may apply a higher rate than others.

What does selling my settlement payments involve? How is the sale done?

There are a few steps to go through in the process of selling your payments. You'll need to know why you want to sell your settlement payments, in the first place, and why you think it is in the best interest of you and those who are dependent on you for support. You'll need to obtain the documents of your structured settlement agreement from the insurance company and then sign papers with the structured settlement buying company preparing to file a court petition. Finally, a court hearing will be scheduled, and you can expect some waiting time for the court session when your sale will be either approved or declined by the judge depending on your circumstances and criteria related to the settlement payment rights that you want to sell.

Is it possible to sell my structured settlement payments without a court case?

No. You must get court approval for the structured settlement sale to be valid and legal. It is against the law to transfer on your settlement payment rights without a court order.

Will I be taxed on money received from a structured settlement sale?

You should consult a tax expert to discuss all tax related issues associated with your structured settlement payments. Your personal injury structured settlement payments are usually exempt from taxes and so are the money that you get from selling those payments.

Lottery structured settlement payments may count as income and so are taxed both when you received them or when you get cash from selling future lottery payments (this information is not meant to be expert or legal advice; consult an authorized professional for your tax or legal questions).

I want to sell my structured settlement payments and I need more detailed and personalized information. Where can I get more help?

Call us at: 1-800-355-5657, or contact us here and we'll get in touch to discuss your situation and assist.