If you’ve been injured by negligence and your personal injury claim has prevailed, you may have accepted a structured settlement, which pays your compensation in installments over time. If you need cash at once, you can probably sell your settlement to a settlement funding company.

When a defendant and plaintiff agree to settle a personal injury claim with a structured settlement, the parties negotiate a cash amount payable by the defendant in exchange for the plaintiff dropping the lawsuit.

Structured settlements are sometimes arranged by personal injury attorneys to avoid going to trial. In other cases, a defendant on the losing side of a personal injury claim might offer to make compensation payments in installments over time.

The money is distributed through periodic payments, usually funded through an annuity. Payments on structured settlements may be paid and received monthly, annually, or quarterly.

Selling a Structured Settlement

Structured settlement payments benefit many of the injured victims of negligence, particularly catastrophic injury victims who require long-term or lifelong care. But should you need money right now to pay debts or for any other reason, a structured settlement might not be right for you.

One option for immediate cash is having a structured settlement buyer purchase your settlement for a lump sum. The right structured settlement buyer may offer to purchase your settlement payments after reviewing your situation.

Structured settlement purchases require court approval, so it can take weeks – sometimes months – to receive the payment for your structured settlement. Be organized and prepared, so that nothing on your end causes a delay.

What Are Your Options When You Sell a Structured Settlement?

When you consult a company that purchases structured settlements, your options will be explained in full. Those options are selling all of the structured settlement payments, selling a part of the structured settlement payments, or selling some of your payments but only for a specified period of time.

When a structured settlement buyer verifies your eligibility, you work with the buyer to determine exactly which payments will be purchased and the amount of your lump sum payment.

After a short waiting period (which differs from state to state), you’ll agree to terms with the structured settlement buyer, who will then seek court approval for the sale.

What Else Do You Need?

If you are considering the sale of your structured settlement, make copies of the following documents. In most structured settlement transactions, the buyer will need copies of:

  • your settlement agreement
  • any other pertinent legal documents
  • proof of your residency
  • government-issued identification

The states and the IRS cannot tax income derived from a structured settlement, but if you receive punitive damages in a personal injury case – beyond your compensatory damages – the punitive damages are taxable.

How Much Can You Receive?

How much can you receive for a structured settlement? That will depend on a variety of factors including:

  • the dollar amount of the payments
  • how frequently you are paid
  • the dates you receive the payments

For an estimate of your structured settlement’s value – or to find out more details and facts about selling your structured settlement to a settlement funding company, contact one of the funding professionals at Universal Funds. We would be honored to serve you.