Selling structured settlement Payments 2024

Selling structured settlement: Do you want to sell your structured settlements? Here are the ultimate guidelines for selling structured settlements in 2023.  

Selling structured settlements offers valuable financial flexibility, especially in times of unexpected expenses or when you need quick cash. To begin, familiarise yourself with the process, the different types of payments you can sell, and the potential benefits that come with it.

Here is all the information you want about selling structured settlements.

What Is a Structured Settlement?

A structured settlement is like getting compensated for wrongdoing through regular tax-free payments over time. These are common in cases involving personal injury, workers’ compensation, medical malpractice, or wrongful death. 

The defendant may agree to pay a structured settlement to avoid a trial, or if it goes to court, the judge determines the compensation. For smaller amounts, the plaintiff might get a lump sum, but for larger amounts, structured settlements are more common.

How Do Structured Settlements Work? 

In a structured settlement, the at-fault party sets up an annuity, a financial product providing payments from an insurance company to the plaintiff. Though annuities aren’t generally recommended, selling structured settlements often lacks alternatives.

The settlement’s terms include payment amount, duration, frequency, and potential increases. Plaintiffs can choose an immediate or deferred annuity. Waiting for grants financial benefits due to accruing interest. Be cautious, though, as accessing money from a deferred annuity before age 59 1/2 incurs a 10% early withdrawal fee and income tax.

Should I Sell My Structured Settlement?

Structured settlements have benefits like guaranteed tax-free payments over time, preventing impulsive spending. Annuities gain interest, making them more profitable compared to a lump sum. Selling a structured settlement is possible but comes at a discount, so be cautious and consider the pros and cons. 

If you sell, have a valid reason like medical expenses or debt repayment, but avoid risky pursuits like gambling. Consult a financial expert, compare offers, and discuss the potential impact with your advisor to make an informed decision.

Selling structured settlement
Selling structured settlement

How to sell a structured settlement

Selling structured settlements is a short-term process. Here are the steps for selling a structured settlement payment: 

Assess Your Situation

Determine if selling your structured settlement aligns with your financial needs, considering immediate cash requirements, future goals, and long-term financial security.

Find a Reputable Company

Research and choose a reputable structured settlement purchasing company with a good track record, transparent processes, and positive customer reviews.

Obtain Offers

Contact the chosen company, share details about your settlement, and receive offers based on their amount and duration.

Review and Choose an Offer

Carefully review the offers, including any associated fees. Select the one that best suits your needs and financial goals.

Legal Documentation 

If you accept an offer, the company will prepare legal documents outlining the sale’s terms. Review them thoroughly before signing.

Court Approval

In some cases, court approval may be necessary to ensure the transaction is in your best interest, depending on your jurisdiction.

Receive Funds

Once the court approves the sale, the company will process the transaction, and you’ll receive the lump sum payment according to the agreed terms.

Remember to approach the process cautiously and seek professional financial advice for an informed decision. Keep in mind that selling structured settlements means giving up future payments for immediate cash, so consider your financial priorities and consult experts if needed.

Read More: Sell my house for cash 2023

What Type of Payments Can You Sell?

Selling a structured settlement can vary in ease depending on its type. There are two forms: Life-Contingent and Guaranteed Payment, awarded for personal injury, wrongful death, or worker’s compensation.

Life-Contingent settlements end upon your passing, making them non-transferable to beneficiaries. On the other hand, Guaranteed Payment settlements can be inherited since they pay out over a fixed period.

There are nine payment types you can sell for a lump sum, each serving different purposes like providing income for life, paying over a specific timeframe, adjusting for inflation, or being linked to the stock market.

However, the cause of your selling structured settlement plays a crucial role in the selling process. Worker compensation settlements face stricter state and federal laws, making the process more complex compared to personal injury structured settlements.

Consulting with your lawyer to discuss your case is essential for a successful structured settlement sale.

Benefits of Selling My Structured Settlement

Selling your structured settlement offers a significant benefit of liquidity. Life’s unexpected situations may demand immediate cash, making selling payments a lifesaver. Whether it’s urgent medical expenses or facing home foreclosure, selling a portion provides relief and peace of mind.

The stress of debt can lead to health concerns, including serious conditions like heart attacks. Selling your structured settlement not only helps financially but also improves overall well-being by reducing anxiety.

Furthermore, selling structured settlements isn’t solely driven by financial hardship. If you received a settlement for a personal injury without impacting your ability to work, periodic payments may not be necessary. As a competent, employed adult, you have the right to make your own financial decisions.

How Much Is My Structured Settlement Worth?

Your structured settlement’s worth when selling your payments is determined by a discount rate, ranging from 9% to 18%. This rate considers future payment values and potential growth the company may lose by not investing immediately. 

The calculation involves multiple factors like payment dates, market rates, economic conditions, and service fees. Keep in mind, a structured settlement calculator can give an estimate, but quotes from purchasing companies may vary due to contract details.

How Long Does It Take to Selling Structured Settlements?

The duration to sell a structured settlement may differ based on factors like your state of residence and the terms of your settlement. On average, the process can take several weeks or even months. 

The reason for this timeline is the time-consuming court approval process and the importance of following all necessary steps to complete the sale correctly.

Is Court Approval Required for Selling My Structured Settlement?

Selling structured settlements usually needs a judge’s approval, especially for structured settlement annuities. Once approved, it’s entirely legal. However, if the judge deems it not in your or your dependents’ best interests, approval may not happen.

At Liberty Settlement Funding, we excel in securing court approval for our clients, increasing your chances of achieving the financial freedom you seek. 


Selling structured settlements offers financial freedom and peace of mind. Selling can be a viable option for achieving financial goals and handling unexpected expenses. Consult an expert for an informed decision benefiting you in the long run.


Do I have to pay taxes when selling my structured settlement?

No, selling your structured settlement won’t incur taxes. Since the transfer of your untaxed settlement payments is court-approved, your lump sum payment remains tax-free.

Can I sell a minor’s structured settlement?

As a legal guardian of a minor with a structured settlement, you can sell part or all of their payments. To proceed, you must convince a judge that the lump sum will benefit the child and is in their best interest.

Who buys structured settlements?

Structured settlement buyers, also known as “factoring companies,” purchase structured settlement payment rights for lump sums of cash. Companies like Annuity Freedom promptly provide cash once the rights holder accepts the contract and receives court approval.