Fri. Jun 2nd, 2023

sell structured settlement process

The Sell Structured Settlement Process

Despite the best laid plans, life’s circumstances can derail a person’s financial well-being. Situations like urgent medical care, education or home repairs can demand a large sum of cash immediately.

When these situations arise, people often choose to sell their structured settlements. Using companies that buy structured settlement payments, called factoring companies, these individuals receive the cash they need upfront and at a discount rate.

Legal Issues

Financial hardships and emergencies can strike at any time, especially for people who are receiving regular payments from a structured settlement. This is particularly true if a person’s money management skills are not up to par and they are struggling to keep up with their bills and high-interest debt.

If you find yourself in such a situation, selling your structured settlement can be an option to help alleviate your financial hardship. However, it is important to understand the legal issues involved in this process.

First, there are state and federal laws that govern this process. These laws are designed to ensure that you receive a fair and equitable deal when selling your structured settlement.

Second, the sale of your structured settlement can only occur if a judge approves it. A judge must determine that the sale is in your best interest and that it will serve your needs.

Third, the sale of your structured settlement can be a risky transaction. It is vital to use a reputable and experienced funding company that will explain all of the nuances and details of your transaction thoroughly and transparently.

In addition, a reliable and trustworthy Pennsylvania funding company should be able to provide you with a clear explanation of the discounted present value of your annuity contract after applying a discount rate. This discount rate typically ranges between 9 percent and 18 percent, but some companies may charge more.

The discount rate that is applied to your annuity contract is important to consider when making your decision to sell your structured settlement. It can have a significant impact on the final amount of your cash.

A discount rate that is too low could result in you not receiving a sufficient amount of your payments. On the other hand, a discount rate that is too high could make you receive less than you would have received had you kept your annuity as-is.

In addition, if the company that is purchasing your annuity fails to meet its obligations, you could lose all or a portion of your annuity payment. This can cause you to run out of money quickly and negatively affect your future quality of life.

See also  Taxation Considerations for Structured Settlement Payouts

Court Approval

Before you can sell structured settlement payments, a judge will need to approve the transaction. This is to ensure that the transfer does not break any federal or state laws. In addition, the court will also want to ensure that you have a good reason for selling your structured settlement payment rights and that the transfer is in your best interest.

The court approval process for a structured settlement sale can take several weeks, especially if the judge has to review all of the details of your transaction. During this time, you should be ready to present all of the information that the judge will need in order to evaluate your case and give his or her approval.

Many people who decide to sell their structured settlements choose to do so for various reasons. They may want to have a lump sum of cash available to pay off debt, make a major purchase or use for other financial goals.

If you are thinking about selling your structured settlement, you should consider hiring an attorney to represent you. These lawyers have experience in this area and can ensure that the deal you enter into is fair and in your best interests.

Another factor to consider is the company that you plan to work with. There are a number of companies that offer to buy structured settlements, so it is important to do your research and find one that is reputable.

These reputable companies can provide you with quotes and discuss your financial needs and goals before making an offer to buy your structured settlement payments. They will also be able to tell you whether your payment rights are worth more or less money than they were originally worth.

However, it is not uncommon for predatory funding companies to send letters to people who have a current financial need and to persuade them to sell their structured settlement payment rights quickly. These companies often offer a small amount of money in exchange for the right to purchase your future payments, and they often trap people in bad deals that leave them with little or no money at all.

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Discount Rates

When you sell your structured settlement, the purchasing company charges a discount rate to reduce your future payments to a present-day lump sum. The discount rate is similar to the interest rate that a bank would charge on a loan.

This discount rate is based on what the purchasing company expects your future payments to be worth in a year. For example, if you were planning to receive $1,000 a year in structured settlement payments, the purchasing company would purchase those payments at less than what they were worth today because of inflation.

The discount rate for selling your structured settlement is a good way to make sure you’re getting the best deal possible. It’s important to get multiple quotes before making a decision, because the discount rates can vary among offers.

In addition, you can save money by working with the insurance company that issued your structured settlement annuity. These companies often offer a higher payout than factoring companies and will typically use their own SSPA (Structured Settlement Payment Acceleration Program) to commutate or accelerate your annuity payments if you choose.

It’s a good idea to hire a professional to look over your documents and contracts before you sign anything. This will protect you from any terms that are not in your best interests.

You should also try to find a company that guarantees the effective discount rate and overall amount of money you will receive once all costs and fees have been paid. This will help you feel secure about the process and prevent you from overspending.

If you don’t know where to start, you can contact the National Association of Settlement Purchasers for a directory of its members. This is a good place to start and you can ask for referrals from other people who have had success with the sell structured settlement process.

If you’re still unsure about the process, you can always talk to an independent financial planner or attorney who specializes in structured settlements. They can explain the benefits of transferring your structured settlement payments and give you sound advice on whether or not it’s right for you.


The sell structured settlement process involves a series of steps that are all designed to help you make the best decision for your situation. The process can take from 45 days to several months, but there are several factors that can affect the timing of a sale.

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The time it takes to sell your structured settlement depends on the company you choose, and on the unique laws in your state. This is why it is important to get a quote from multiple companies before making any decisions.

When you’re ready to sell your payments, you should contact a professional that can assist you with the process. This will include providing a quote, answering any questions you may have, and assisting with the paperwork.

After you’ve chosen a company, you will need to provide the company with information about your annuity and your insurance company. This will allow the buyer to determine if you qualify for a discount rate. The discount rate will be determined based on your annuity’s projected interest earnings and will reduce the amount of money you receive as a lump sum.

This process is typically completed within a month or two after you’ve signed the contract. However, it can take longer to receive a final offer as some companies require a professional assessment or a “cooling period” after you sign the contract.

Selling your structured settlement can be a great way to get a lump sum of cash for immediate financial needs. You can use the money for a variety of things, including paying off debts, investing in your future, or making a major purchase.

It’s important to remember that the company you choose should be reputable, fair and honest. They should be willing to discuss your financial goals and offer a range of sale options to suit your needs.

It’s also a good idea to check out the company’s reputation and customer satisfaction ratings before choosing to work with them. Avoid companies that try to push you into a deal. Often times, these companies will be trying to take advantage of you or will not be honest about their offers.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.