What Is a Structured Settlement?

A structured settlement is the result of a lawsuit in which a defendant has been found at fault for the injury or death of someone. As a result, they must pay them a large sum of money to settle the lawsuit.The large lump sum is used to set up an annuity or structured settlement that is paid over time. It can be set up to pay monthly, annually or even quarterly payments. An insurance company holds the money and distributes the portions as they become due. The final result is a structured settlement, or, in other words, a settlement that’s been structured to be paid over time.

Why Sell A Structured Settlement?

The top reasons people chose to sell payments are: (1) pay off high interest debt, (2) pay for education, (3) purchase a home or vehicle and (4) pay medical bills. Simply put, people sell structured settlements because some unexpected event or situation changed from the time it was set up. As much as you try to anticipate what your future monetary needs are, it just cannot be done to perfection. If you are someone receiving settlement payments overtime but now has a need for a lump sum, often selling is the only solution. Banks do not consider structured settlement payments as a source of income and will not loan based on that and insurance companies will not “undo” the structured settlement. (See, Pros and Cons of Selling Structured Settlement Payments)

How can you sell a Structured Settlement?

The transfer of your structured settlement happens right in your home state. You work with a company like Fairfield Funding. (See Selecting a Structured Settlement Company.)Each transfer or sell of structured settlement payments is governed by state and/or Federal law. The company you move forward with will be familiar with the laws and should walk you through the legal process thoroughly. (See, The General Legal Process of Selling Structured Settlements.) You are encouraged to seek legal, financial and tax advice if you have any questions when considering the sale of your structured settlement payments.

Answers to commonly asked questions about selling structured settlements:

What interest rate will I be charged if I sell structured settlement payments?

The interest rate applied to determine the purchase price varies depending on the following factors: The Insurance Company issuing payments, Payment Dates, Payment Amounts and the current Economy. Companies that buy structured settlements use a calculator that determines the time value of money based on the payment dates and amounts. Then, they factor in the current economy and the insurance company issuing the structured settlement or annuity payments to you. The interest rate charged when selling structured settlement payments will usually range from about 6.0% to 18%.

How long does it take to sell structured settlement payments?

On average, it takes 30 – 45 days to sell structured settlement payments. Selling your structured settlement payments requires court approval which is usually the main cause for any unexpected delays in the transfer. Each state has an individual statue that may determine some of the waiting periods required throughout the process and can be a factor in the amount of time it takes to sell structured settlement payments.

Can I sell my structured settlement payments?

Yes, you can absolutely sell structured settlement payments if they are not the result of a worker’s compensation or a class action settlement. The most commonly sold structured settlement payments arise from wrongful death, personally injury and medical malpractice but we can buy much more! Even beneficiaries of a structured settlement can sell structured settlement payments.

How do I sell my structured settlement payments?

You can sell your structured settlement payments by working with a company that purchases structured settlement payments. They will help facilitate a transfer. Regardless of who you work with, the process should begin with a disclosure statement outlining what you are selling and receiving. Next, after a state statute determined wait period, you will sign a contract. After the contract, the company will file a petition for court approval in your state which will allow them to set a hearing date. If the judge approves the transfer, you will receive your lump sum.


From our blog:  5 Things To Know Before Selling Your Structured Settlement 

Customer reviews


I have no complaints! They were super nice and friendly the whole time. And quick. I have done a few transfers with them, and they even keep in touch when I am not a current client. Kristin and Amanda are super sweet and I would send anyone their way! 

Sophie, Washington DC


I would recommend Fairfield Funding to anyone. I had a very pleasant experience with this company. Throughout the process, I spoke with a few different employees, and everyone was polite and informative. I felt comfortable and trusted them with handling this major financial decision for me and my family which is very important.

Edmund, NY, NY


I have gone with this company multiple times because they get my money to me fast and are always nice and take my calls and answer my questions. I know I can count on them to get the job done and I don't ever worry about them not getting my money to me as fast as possible.

Heather, Tampa, FL

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