Structured Settlement Frequently Asked Questions

There are some frequently asked questions about structured settlements that many people have. Here are some of the most common ones to help you point in the right direction. However, keep in mind that there may be guidelines that apply that are very specific to a given situation.

Should I sell my structured settlement?

Some people are very happy to receive a monthly, quarterly, or yearly payment. It is enough for them to do what they want with the funds. Others, however, have large amounts of debt, medical bills, need a home or vehicle, or want to buy a business. Therefore, the settlement may be worth selling. You have to look at your own needs. The options you have will also depend on the laws that apply in the state where you live.

Is it legal to sell a structured settlement?

As long as there are no stipulations in the agreement that you will not be able to sell it, accepting it is legal. However, you want to take the time to read all the details of any proposed offer on the table. You are not required to accept any of them. You want to decide who can offer you the best deal if you are going to sell it.

How much do I have to pay to sell my structured settlement?

You should never have to put up money up front to sell your structured deal. If you agree to sell it, the processing fees, legal entities, and more must be fully disclosed. They will also be deducted from the settlement amount you get.

Do I have to pay taxes on structured settlement payments?

Taxes are a part of life and apply to all income a household receives. You will have to pay taxes on the settlement amount you receive in a given tax year. It’s a good idea to find out how that will affect your tax situation. Since taxes are not deducted, you may owe money to the IRS when you file. You may want to have a savings account to deposit a portion of your settlement each month for these purposes.