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Best Structured Settlement Buyout Companies

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By: Ashley Eneriz
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Edited by: Kathryn Parkman

Best Structured Settlement Buyout Companies

If you’ve been involved in a lawsuit and awarded damages, you may have agreed to a structured settlement. This is when, instead of receiving a lump sum of the award amount, you receive it in installments over a set period of time.

But what if you need the money sooner? Structured settlement buyout companies purchase future payment rights in exchange for an upfront lump sum.

Before selling your structured settlement, read our guide to learn whether it’s right for you. We look at broker and direct-funded structured settlement buyers and provide the information you need to make an informed decision.

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Our picks for the best structured settlement buyout companies

*Lower discount rates generally result in a higher lump-sum payout, although actual rates vary based on your payment schedule and other factors. **Actual timing depends on court approval.

Structured Settlement Buyers Guide

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When someone receives a structured settlement, it’s typically regular payments over a specific period. However, some individuals may prefer to have a lump sum of cash instead of waiting for periodic payments. That’s where a structured settlement buyout company comes in.

While you would ultimately walk away with less money in the long run, a buyout gives you immediate access to the cash, which you may want or need for paying off debts, funding education or making investments.

Once you understand how structured settlement buyouts work, compare companies based on their discount rates, funding speed, customer reviews, state availability and whether they purchase payments directly or act as brokers.

Key insights

Structured settlement buyout companies are financial purchasers, not lenders.

Jump to insight

Consider the pros and cons before deciding if you should keep your structured settlement as is or sell for a lump sum.

Jump to insight

A higher offer doesn’t always mean more money. Compare the net lump sum you’ll actually receive.

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What is a structured settlement buyout company?

A structured settlement buyout company is a financial institution that purchases structured settlements from individuals who are receiving payments over time as a result of a legal settlement or court judgment.

A buyout company provides you with a lump sum and takes an agreed-upon cut.

Structured settlement buyout companies don’t make loans or issue new settlements—they buy an existing stream of court-approved settlement payments from people who prefer cash now over guaranteed future income.

How structured settlement companies work

Imagine you were in a car accident and suffered significant injuries. You were awarded a structured settlement from the responsible party’s insurance company. The settlement specified you would receive monthly payments of $2,000 for a period of 20 years, totaling $480,000.

Funding typically happens shortly after court approval.

If you would rather have a majority of that money upfront, you might use a structured settlement buyout company. The buyout company evaluates the value of the remaining payments based on factors such as the total amount of the settlement, the payment schedule and the prevailing interest rates.

If you accept the offer, you sign a contract with the buyout company. The buyout company then takes over the rights to the future payments and pays you a lump sum.

Pros and cons of structured settlement buyout companies

“Never sell your structured settlements without first understanding the value you’ll be losing and getting offers from several competitors,” said Jeremy Babener, president of Structured Consulting. “Often, by keeping your structured settlement payments you’ll benefit from a federal tax subsidy and maintain financial security. Don’t give them up unless you have to.”

Babener said that sometimes selling is the right move, especially if you have overwhelming debts.

“A good financial advisor can compare your debt’s interest rate to the rate that the buyout company is using to value your payments,” he said. “If the interest rate on your debt is much higher, selling may be a wise option for you.”

Pros

  • Immediate access to funds: With one lump sum of cash, you can use it for a down payment, college tuition or investing.
  • Financial flexibility: With more money upfront, you can repay your debts and better support your budget.
  • Avoid long-term waiting: Waiting for a settlement to pay out over 10 to 20 years can also be risky since you don’t know if the future holds inflation risks.

Cons

  • Reduced overall payout: Selling a structured settlement means accepting a discounted amount of the total future payments.
  • Loss of future income: You forfeit the future periodic payments you would have received.
  • Legal and financial implications: There can be tax implications, potential penalties and legal restrictions that you need to be aware of.

How to choose a structured settlement buyout company

When choosing a structured settlement buyout company, verify the company’s reputation and credentials. There are many scam companies out there, so you want to use a trustworthy company that is both regulated and licensed.

Questions to ask a structured settlement company

  • What is your discount rate?
  • Is this your final written offer?
  • Are there additional fees?
  • Are you purchasing my payments directly?
  • Are you licensed to do business in my state?
  • How long will funding take?

Whichever company you choose should be clear in its process, terms, timelines and fees. Don’t shy away from comparing offers from multiple companies while assessing not only the lump sum amount they offer but also the overall value, including any associated fees and the impact on your long-term financial goals.

Pro tip
A company offering the lowest discount rate generally provides the highest lump-sum payout. Even a small difference in discount rate can mean thousands of dollars more or less in your pocket, so compare multiple written offers before accepting one.

» MORE: How to manage your money

FAQ

Are there different types of structured settlements?

Yes, there are different types of structured settlements. The most common is a periodic structured settlement, where you receive a set amount of money for a set period of time. Another type is a life-contingent structured settlement, which provides payments for your lifetime. There is also a deferred lump-sum structured settlement, where you are paid at a set date in the future.

When is a structured settlement buyout a good idea?

If you need a lump sum of money sooner rather than later for getting yourself out of a tricky debt situation, or for buying a house, paying for college expenses or starting a new business, you may want to pursue a buyout. Make sure you know upfront how much it will cost you and are not pressured to make the decision.

Who should use a structured settlement buyout company?

A structured settlement buyout should only be used if you are in dire financial need. It might sound more fun to have a huge amount of money today rather than to get a small amount each month, but keeping your structured settlement can help preserve a reliable stream of income and reduce the risk of overspending.

» MORE: How to choose a financial advisor

Are structured settlement buyout companies regulated?

Yes. Every state has laws governing structured settlement transfers, and a judge must typically approve the sale before it can go through. The court’s role is to determine whether the transaction is in the seller’s best interest and complies with state law. This requirement exists because structured settlements are often intended to provide long-term financial security for injury victims.

What is the Structured Settlement Protection Act?

Structured Settlement Protection Acts are state laws that require court approval before structured settlement payments can be transferred. Federal tax law also discourages unapproved transfers by imposing a 40% excise tax on certain noncompliant factoring transactions.

How much do structured settlement buyouts cost?

The cost of structured settlement buyouts varies depending on various factors, including the amount of the settlement, the remaining payment duration and the specific terms of the buyout agreement. Typically, structured settlement buyout companies will offer a lump sum that is less than the total value of the remaining payments; you can expect the company to take a large percentage for providing you with cash upfront.

Disclaimer

Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.

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    Guide sources

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from reputable publications to inform their work. Specific sources for this guide include:

    1. The National Structured Settlements Trade Association, “What are Structured Settlements?” Accessed July 1, 2026.
    2. U.S. Department of Justice, “Structured Settlement Brokers.” Accessed July 1, 2026.

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