Should I Sell My Structured Settlement Or Keep It?


So, you’ve been awarded a large sum of money and have opted for a structured settlement.  With a structured settlement, you get a monthly payment of a certain amount. This monthly amount can be used to pay for a bill that ties to the settlement or other bills you have each month. 

What do you though when you have an emergency come up and need more than that monthly check provides you? You’re in debt –medical bills, car payment, house payment, etc. What can you do with that structured settlement, if anything?

To Sell or Not To Sell Your Structured Settlement: The Problem You Could Have

Well, there is an option at your disposal. You could sell the structured settlement, which will provide you with a lump sum check to be applied to your current situation. But, you need to understand that there are some good and bad things with doing that.

Example Of Possible Situation

You are about $25,000 in debt; you lease a vehicle and rent your home. It’s hard for your family to make your monthly payments on time. And, you don’t have much money in your savings account. You hope to build your savings up so that you can purchase a home in the next few years.  You’ve debated about going to a structured settlement company to sell it off so that you can pay the bills off and start building the nest egg. 

There’s a problem though. The amount you get back from selling it isn’t going to pay off your debt. Should you sell it or should you keep it?

This could be a real conundrum. After all, you’re trying to get ahead, but feel that the only way this can be done is to talk with structured settlement companies to see what kind of deal they can give you. However, it’s not enough. Do you sell it and pay what you can off? Or, do you keep the structured settlement as is and keep paying like you’re paying? That’s the problem!



What Happens When You Sell Your Structured Settlement?

Your structured settlement is designed to give you peace of mind each month – it’s a tax-free amount too. However, if you were to sell your structured settlement, which is very tempting for many people, you sell any rights to getting those monthly payments. On top of that, you could possibly need to pay state and federal taxes, which will reduce the amount you get back from the sell-off. 

Simply put: selling that structured settlement of guaranteed monthly payments means you get less money back.

Yes, you’d like to purchase a home, but what’s more important is to pay your bills off. And, this should be done without touching the structured settlement.

The Solution To Get Out Of Debt

If you’re having difficulties paying your bills and selling your structured settlement isn’t a worthwhile option, you need to learn how to live within your means. It’s important that you get in touch with the National Foundation for Credit Counseling, which is non-profit organization that can get you in touch with local debt counselors.  These counselors will look at your predicament and negotiate with your creditors to set up a payment plan.

And, here’s another option for your structured settlement: invest the monthly payment each month into an IRA for several years with a five percent yearly return.  You’ll have more money to pay off your bills, get out of debt and buy what you want.

About our Should I Sell My Structured Settlement page.

While we try to provide helpful information, the content on this site is not a substitute for individual legal advice regarding whether you should sell your structured settlement, its value, the term sheet provided by a settlement broker,  proposed sale, whether your settlement can be bought or sold, or the reputation of a broker.

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