An Introduction to Selling a Structured Settlement

By: Jocky Marshal


The current financial climate has left most people in need of a little extra cash and people are now starting to think more and more outside of the box when it comes to getting it. If you have been awarded a structured settlement in the past and have not yet received everything that you are owed, you might be interested to learn that there are companies that are willing to purchase the remainder of your settlement for an instant lump sum. As most people donít exactly sell structured settlements on a regular basis, the idea can seem a bit difficult to get their heads around but it is actually incredibly simple. Here are the answers to the most frequently asked questions about selling structured settlements.

Why Would a Company Want to Purchase My Structured Settlement?

The primary reason is that such companies do not offer the full price of the settlement and can therefore profit from paying you an instant lump sum. For example, if you are owed a hundred thousand dollars on your settlement and it will be paid over the next ten years, a company might offer you eighty thousand dollars. This benefits the seller as he/she gains access to some much needed cash and it benefits the buyer as after ten years, the company will have made a profit. Other benefits to the buyer include the fact that in many cases, there are tax related savings to be made also.

If I sell my Structured Settlement, How Long Must I Wait to Receive the Cash?

While it does vary depending upon the company that you sell your structured settlement to, in general you can expect to receive your cash within four to six weeks.

Am I allowed to Sell my Structured Settlement?

Although the specifics of your settlement will have to be analyzed by an attorney to discern a definite answer to this question, in most cases, there is nothing stopping people from selling their structured settlement. This is because it makes no real difference to the person who is paying the damages.

Will I Have to Pay Taxes on the Lump Sum that I Receive?

While there are exceptions to this rule, in general if you have received your structured settlement as a result of a personal injury lawsuit, you will be exempt from taxes. On the other hand, if you were awarded a structured settlement in relation to any kind of employment dispute, it is likely that you will be taxed on any lump sum you receive.

Can I Just Sell Part of My Structured Settlement?

Many people who are interested in selling their structured settlement are interested because they need cash for a specific reason. Often the amount of cash that they need is less than the total that they are owed as part of their structured settlement. Because of this, it is very common for companies to only purchase a portion of a settlement. The willingness of a company to do so however does depend on the size of the settlement in question.

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