What are the advantages of selling my structured settlement?

Selling provides immediate access to funds for debt payoff, investments, major purchases, or emergencies. You can also consolidate payments or eliminate long-term payment schedules.

What are the disadvantages of selling?

You receive less than the total future value due to discount rates. You lose guaranteed future income, and the process requires court approval which takes time.

How do I decide if selling is right for me?

Consider your financial needs, the discount rate, your ability to manage a lump sum, and whether you need immediate funds. Our calculator helps you see the numbers.

Can I sell just part of my payments?

Yes, you can sell a portion of your payments while keeping some for future needs. This balances immediate access with long-term security.

Pros and Cons of Selling a Structured Settlement | Smarter Payouts

Making an Informed Decision

Selling your structured settlement is a major financial decision that can significantly impact your future. While it provides immediate access to cash, it also means giving up guaranteed future income. Understanding both sides helps you make the right choice for your situation.

Key Insight: There's no universal "right" answer. The decision depends on your unique financial situation, goals, and needs. This guide helps you evaluate what's best for YOU.

Advantages of Selling

Immediate Access to Large Lump Sum

Handle emergency expenses (medical bills, urgent home repairs)
Pay off high-interest credit card debt or loans
Make down payment on a home or vehicle
Cover major life events (wedding, education)
Access funds when you need them most

Investment Opportunities

Invest in business ventures or startup costs
Purchase income-generating real estate
Start or grow a retirement account
Potentially earn higher returns than your discount rate
Build wealth through strategic investments

Financial Flexibility

Control when and how you use your money
Consolidate multiple debts into one manageable payment
Improve credit score by eliminating debt
Create your own financial plan without constraints
Freedom to adapt to changing circumstances

Eliminate Financial Stress

Stop waiting for monthly or annual payments
End anxiety about managing limited income
Handle unexpected financial emergencies
Peace of mind with accessible funds
Simplify your financial situation

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Disadvantages & Risks

Receive Less Than Total Value

Discount rates typically range from 9-18%
You'll get 60-85% of total future payments
Time value of money calculation reduces your payout
The longer the payment period, the lower the offer
Cannot get 100% of future value in any scenario

Loss of Guaranteed Future Income

No more regular periodic payments for living expenses
Give up tax-free income stream
Lose financial security for retirement or long-term needs
Cannot reverse the decision once court-approved
May regret selling if lump sum is mismanaged

Government Benefits Impact

Large lump sum may affect SSI or Medicaid eligibility
Could disqualify you from needs-based assistance
May push income over benefit thresholds
Requires careful planning to avoid losing benefits
Consult benefits advisor before selling

Mismanagement Risk

Statistics show many people spend lump sums quickly
Without financial discipline, money can disappear fast
May face pressure from family/friends for money
No built-in spending controls like periodic payments
Should have solid financial plan before selling

Not Sure if Selling is Right for You?

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When Selling Makes Sense

Good Reasons to Sell:

Eliminating high-interest debt (credit cards, payday loans)
Emergency medical expenses not covered by insurance
Business investment with clear ROI projections
Education costs for yourself or dependents
Down payment on income-generating property
You have other reliable income sources
You have a detailed financial plan for the funds

When to Avoid Selling

Poor Reasons to Sell:

Non-essential luxury purchases (vacations, vehicles, etc.)
Pressure from family or friends to access money
Gambling or speculative investments
No clear plan for how to use the funds
You depend on payments for basic living expenses
Receiving government benefits that could be affected
Acting out of impatience rather than genuine need

Common Questions About Pros & Cons

The main benefits include immediate access to cash for emergencies or investments, flexibility to pay off high-interest debt, ability to handle large expenses like medical bills or education, and freedom from waiting for periodic payments.

Potential downsides include receiving less than the total value due to discount rates (typically 9-18%), losing guaranteed future income, possible impact on government benefits, and the irreversible nature of the transaction once approved.

Consider selling if you have genuine financial need, high-interest debt to eliminate, investment opportunities with higher returns, or major life expenses. Avoid selling if you rely on payments for living expenses or have no clear financial plan for the lump sum.

Related Resources

Alternatives to Selling

Explore other options like structured settlement loans or partial sales that may better fit your needs.

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How to Maximize Your Offer

Learn strategies to get the best possible price when selling your structured settlement.