Irfan Ahamed
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What Legal Requirements Exist When Selling a Structured Settlement?

Structured settlements are designed to help offset the financial cost of injuries you may have sustained through an accident, as well as in other situations. The settlement amount is held for you, and you receive monthly payments from it for a specified amount of time. However, while all of that money is technically yours, there are some legal requirements that have to be satisfied if you decide selling your structured settlement is in your best interest. You’re not free to do with it as you wish. Here’s what you should know.

Disclosure

When you decide to sell your structured settlement to a buyer, the law requires that buyer to provide you with “full disclosure” regarding the particulars of the sale. The buyer should clearly explain all the financial terms of the sale so that you understand them. This is vital for making a wise decision regarding your financial future.

Cool Down

You might think that once you sign the documents authorizing the sale of your structured settlement, things would progress quickly. That’s not necessarily the case. The law requires a cool down period during which you have the opportunity to reassess your situation and change your mind. If you change your mind during this period, you can cancel the sale with no financial obligations to the buyer. This is important protection, and is designed to ensure that you’re actually making the best decision for your needs, rather than a hurried one. 

Legal Advice

State law requires the buyer to advise you that you should seek out professional legal advice about selling your structured settlement. While it’s not mandatory to get legal advice in all states, it is highly recommended, as it can help you make a better decision regarding your financial future. An experienced lawyer can point out things that you might not notice with the deal, ensuring that you’re well-armed if you decide to pursue the sale with this particular buyer.

The Legal Process

In addition to the legal requirements above, you will have to go back to court. The sale of your structured settlement must be approved by a judge. There are several factors that will weigh on the judge’s decision, including the reason you want the money, your current financial situation, and whether the judge thinks that the sale is truly in your best interest or not. The sale cannot move forward until the judge issues a court order approving it. After that point, you’ll be able to receive the lump sum payment for your structured settlement.


A considerable amount of stress and hassle in the requirements above can be eliminated by working with a structured settlement company. These firms offer more than just a helping hand. They provide you with the means to get your sale in front of many different qualified buyers and then accept bids on the sale, ensuring that you’re able to get top dollar for your structured settlement. It’s simpler and easier, and those are definitely things that benefit you.