Your lawsuit settled for payments over time. We price what those future payments are worth today, take them to competing buyers and show you the rate behind every offer.
What goes wrong when one buyer prices your payments.
The same worksheet comes with every offer.
| Monthly payment | $2,500 |
|---|---|
| Payments left | 48 |
| Total still to be paid | $120,000 |
| Buyer’s discount rate | 12.0% |
| Purchase price | $94,935 |
| Discount from total | 20.9% |
| Our fee | built into the price |
| Sell all 48 payments | Sell the next 24 | Keep them | |
|---|---|---|---|
| Cash today | $94,935 | $53,108 | $0 |
| Payments still coming to you | None | 24 payments of $2,500 | 48 payments of $2,500 |
| Total you receive | $94,935 | $113,108 | $120,000 |
| What you give up | Every future payment | The next two years | A lump sum now |
Illustrative example at a 12% yearly discount rate, first payment one month away. Totals add up the payments as scheduled; they assume the payer keeps paying and are not adjusted for the value of money over time.
The settlement agreementThe payment schedule and record so farYour attorney's contact detailsAny lien or payoff lettersSome lawsuits settle for one check. Others settle for a series of payments: the insurer or the defendant agrees to pay you a set amount every month or every year until the total is paid. That schedule of future payments is an asset, and like a private note it can be sold for a lump sum today.
There are two main kinds. A structured settlement is funded by an annuity bought from a life insurance company, usually in a personal injury or workers’ compensation case. Those have their own rules and their own page: selling structured settlement payments. A settlement installment agreement is simpler: the defendant, or its insurer, promised to pay over time, with no annuity in between. Business disputes, employment claims and contract cases often settle this way. This page is mostly about the second kind.
You can sell if you are the person entitled to the payments under the settlement agreement and the payments are not in dispute. Before a buyer will bid, it reads the agreement for three things.
Your attorney from the case is the best first call. They know the agreement, the payer and any liens, and a buyer will usually want to speak with them.
Selling your installments is one of three ways people turn a settlement into cash early. Post-settlement funding is the related option: the case has settled for a lump sum, but the check has not arrived because releases, liens or insurer processing are still in progress. A funder advances part of that amount during the wait. If your settlement pays in one check, that is the product to look at, and we can talk through how its cost compares.
Pre-settlement funding is a different product altogether. It is an advance on a case that is still open, priced for the chance you lose, and usually far more expensive. It is not what this page covers. Our guide to how the legal settlement market works sets all three side by side.
Timing depends mostly on paperwork, not on the buyer. An installment agreement with no assignment limits and a large insurer as payer is the simplest case. Getting the payer’s consent, collecting lien payoff letters and, for structured settlements, waiting for a court hearing each add time. We tell you which of those apply to your file at the start, so the timeline you plan around is a realistic one.
Every sale is at a discount. In the example above, $120,000 of payments brings about $94,900 today, and the gap is the price of waiting and of the risk the buyer takes on. The rate depends heavily on who pays: an insurer’s promise prices much better than a small company’s or an individual’s. The method is the same one used for notes, explained in how note buyers calculate a price, yield and discount.
Taxes depend on the type of claim. Recoveries for physical injury are generally treated differently from back pay or contract damages, so ask a tax adviser before you sell.
Keeping your payments is often the better answer. If the installments cover rent, care or other regular bills, selling them swaps a dependable income for a one-time sum. If you need a set amount, selling only the next year or two of payments may cover it. If the payer is already slow or disputing what it owes, sort that out first, because a buyer will price the dispute in. And if you do sell, get more than one written offer and compare them on the same basis, using our checklist on how to compare offers.
Sometimes. A buyer may get the payer's written consent or use a structure that works within the terms. Some agreements leave no room, and we will tell you that at the start rather than after you have waited for a bid.
No. Pre-settlement funding is an advance on a case that is still open, and it is priced for the chance you lose. Selling settlement payments means selling installments from a case that has already settled. They are different products with very different costs.
An advance on a settlement that has been agreed but not yet paid, usually a single lump sum held up by releases, liens or insurer processing. It is a related option if your money is coming in one check rather than over time.
For a structured settlement funded by an annuity, yes, under your state's transfer act. For a plain installment agreement with a defendant or insurer, usually not, unless the settlement involves a minor or someone under guardianship.
Yes. Selling the next one or two years of payments, or a set dollar amount, is common. You get cash now and the later payments still come to you.