Sell Settlement Payments, Is it hard?

Sell Settlement Payments

Sell Settlement Payments

It is common to find adverts encouraging you to sell settlement payments. Life is full of critical situations that force people to sell off their assets. Structured settlements are examples of the assets people exchange for a lump-cash. You are probably reading this article because you are not sure how to go about it. Nonetheless, the first question you need to answer is if you should sell settlement payments at all. In this complete guide, you will understand the process and the risks involved in this decision.


Sell Settlement Payments: The Regulations

Structured settlements are support arrangements to cater to the well-being of a victim of personal injury. This payment covers the sufferings of the person as a result of the damage. It is an order from the court to the defendant to pay a certain amount of money to the plaintiff. The payment is not a once and for all settlement but spread across a period. Structured settlements became necessary to prevent claimants from exhausting their funds rapidly. This arrangement encourages the individual to withdraw the money gradually and also invest it when needed.

Structured payments were not frequent until the 1980s. The popularity was due to the new laws and tax regulations in the US. Due to these regulations, all wrongful deaths and personal injury settlements became non-taxable. Therefore, the income and interest individuals get from their settlement payments is tax-free. Although claimants ought to spend this stable stream of income gradually, unprecedented circumstances may prevent them. During such situations, the law permits you to sell settlement payments to credible buyers.

Nonetheless, there are federal and state laws that protect claimants from exploitation by buyers. The Federal Structured Settlement Protection Act of 2002 is a federal law that caters to this situation. Ensure that you are conversant with structured settlement laws in your state. These laws differ across the states of the United States. You can make things easier by speaking to an attorney in your state for first-hand information from a credible source. Understanding the legalities involved will enable you to make informed decisions when you sell settlement payments.


Sell Settlement Payments: The Rationale

Structured payment arrangements are naturally limiting. The claimants can only receive payments on a strict schedule. In some cases, the agreement no longer fits the financial needs of the recipients. There are also situations in which the individual regretted not getting lump cash and wish to reverse the decision. In general, it is financial needs where claimants need urgent cash that makes them sell settlement payments. Nonetheless, it is not a decision you should make out of excitement or pressure. Once you sell settlement payment, you will not be able to reverse the situation.

The most popular reasons people sell settlement payments include:

  • Purchasing a home
  • Buying an auto
  • Affording education
  • Settling debt
  • Covering a divorce
  • Paying medical bills
  • investing in a business

Note that you should find alternative means to meet these needs. Your structured settlements are supposed to cater to your financial needs in the long run. So, you should only sell them as a last resort. You should speak to financial experts before you go ahead with this decision. Besides, you should also consider selling part of your payment instead of all. You will still be able to find buyers who want to procure a portion of the structured settlement. If selling parts of the settlement will cater to the need, you should not sell everything.


Sell Settlement Payments: The Market

Sell Settlement Payments

Irrespective of your reason to sell settlement payments, you can find a means to get cash for them. You do not have to keep wishing that you have access to funds now instead of a structured settlement. There are multiple options you can explore to sell settlement payments. Structured settlement dealers are called factoring companies. These organizations purchase structured settlements from claimants. Hence, you can contact these companies to provide you a lump-cash in exchange for structured payments.

More so, factoring companies consider the worth of your remaining payments and will provide a quote for the purchase. Ensure that you are not under pressure throughout the process. If you notice that a company’s representative is urging you to make a decision quickly, avoid the organization. Besides, you should not contact only one company to get a quote. Meet different corporations for structured settlement quotes. Compare their offers before you make the final decision. Moreover, it is not a crime to let the company’s representative know that you are considering other offers.

It is also vital that you do your homework on a factoring company before you contact its agent. Some companies have a high number of rejects, while some have a history of bankruptcy. Such companies are not good fits, and you should avoid them. Besides, it is unlikely that a judge will permit the sale to such companies. Therefore, to avoid wasting your time, you should not contact such companies from the onset. Moreover, ensure that you are clear about the offer. Get explanations for any technical term that is strange to you from the company’s representative.


Sell Settlement Payments: The Discount Rate

If you do not understand the discount rate, you can never know a fantastic offer when you get one. You cannot afford to have assumptions when you sell settlement payments. When you want to sell settlement payments, note that you will not get the full value from the factoring company. You may not like this arrangement, but this is the reality in the market. The reduction is one of the reasons you should think twice before you sell settlement payments. The discount rate is the difference between the structured payments and the total amount of the lump sum.

Furthermore, the discount rate for selling structured settlements is a little technical. When shopping in a mall or an online platform, you will look out for high discounts. In that situation, a high discount implies that you will be saving more. However, you should not have the same mindset when you sell settlement payments. An offer with the highest discount rate is not ideal for you. A high discount implies that the factoring company will earn more while you earn less, and vice versa.

Therefore, ensure that you know the factoring company’s discount rate before you agree to sell settlement payments. The reduction from the total value is the sacrifice you will have to make for cashing out now. Note that you can never find an organization that will offer you a zero discount. Hence, your best bet is to find a factoring company that offers the lowest discount rate. It is not convenient to let go of some part of your payments. Nonetheless, if the sacrifice is worth it, then you should go for it.


Sell Settlement Payments: Qualities of Good Buyers

You must sell settlement payments to qualified buyers. How can you know them? They have the following qualities:


Topnotch Industry Experience

You should find a buyer with rich industry experience when you sell settlement payments. Such an organization has an excellent understanding of the process. It will be able to guide you through and prepare you for the appearance in court.


Fantastic Rating with the Better Business Bureau

The Better Business Bureau (BBB) is a non-profit organization that assigns rankings to companies by using an Accredited Businesses System. Therefore, you can trust any business that has high ratings with the BBB. Contact a factoring company that has excellent ratings with the BBB when you sell settlement payments.


Professional Customer Service

A customer-first factoring company is your best bet when you want to sell settlement payments. Such a company will place value on you and ensure that it places a premium on your satisfaction. In most cases, the company will assign a representative that will attend to you throughout the process.


Few Critical Reviews on Yelp

A buyer with a few negative comments on Yelp and other ranking websites is a great option. It shows that the organization has many happy customers.


Free Quote Provided In Writing

A client-oriented factory company will offer customers free quotes in writing. This quote will enable you to have a vivid view of what to expect when you sell settlement payments.


No Obscure Charges

Factoring companies often have fees that they deduct from the total payment. Reputable organizations will let you know about these charges beforehand. You should avoid a buyer with a culture of charging hidden fees because it shows a lack of transparency.


Sell Settlement Payments: Best Factoring Companies

Sell Settlement Payments

Based on the above criteria, here are the best factoring companies to trust when you want to sell settlement payments:



SenecaOne offers multiple options for dealing with the sale of structured payments. The company is transparent in its dealings and does not charge legal or processing fees. SenecaOne has been in the game for over 17 years and has thousands of happy customers.


Fairfield Funding

This factoring company is popular because of its superior customer services. Fairfield Funding has excellent ratings with the BBB, and you can trust it to deal honestly. The company has a reputation for offering individualized services that make trading structured settlements seamless.


J.G. Wentworth

J.G Wentworth deals in structured payments and other annuities. This factoring company is customer-oriented and will do all it can to respect your choice. The company’s representatives will not pressurize you and will let you bid your time.


Stone Street Capital

Stone Street Capital has a reputation for putting the needs of their clients first. The company has been around for over 25 years. It has been 25 years of providing quality services, which explains why the company has numerous happy customers.



Sell Settlement Payments: The Steps

You must be conversant with the process involved in selling settlement payments. Understanding the procedure will prepare you for the journey ahead. You will know what to expect at each stage of the process. Here is a summary of the steps involved to sell settlement payments:


Find a Topnotch Factoring Company

The next thing to do is to find buyers once you are confident that you want to sell your payments. You must contact an organization that has a reputation for offering the best services. A simple internet search will give you a clue about the company you want to reach.


Obtain a Quote

The essence of contacting a buyer is to get a structured settlement quote. Endeavor to get quotes from different companies before you pick the best.


Get Court Approval

After you are satisfied with the offer of a company, you need to seek a judge’s approval. The judge will evaluate the proposal and decide what is best for you. If the judge thinks that you are making a wrong decision, the deal will fall through. However, in the absence of any red flag, you will get approval.


Payment Processing

The final stage after court approval is payment processing. The factoring company will alert the insurer about the sale. Then, the factoring company will process the payment. You will have to wait for some time before you finally receive the payment. How quickly you get the payment depends on the company.



The decision to sell settlement payments is not easy and comes at a price. You will have to let go of a part of the total value to get a lump-sum. Therefore, it is not a decision you should make without considering the implications. Nevertheless, life is not a bed of roses. You may be at a crossroad where you have no other choice but to cash out. If you are in such a situation, find a reputable factoring company that will offer you the best deal. Remember to do your findings of the company before you offer it your payment. You cannot afford the stress of working with an organization with inferior quality services.

Buy Structured Settlements, Is it easy?



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