Can You Sell Your Lawsuit?

Strictly speaking, you cannot sell your lawsuit to a third party. However, pre-settlement legal funding (often called lawsuit loans) lets you receive an advance on an expected settlement without repayments if your case is unsuccessful. You’re essentially trading part of your potential recovery for immediate cash.

Pre-settlement funding is a non-recourse advance—meaning you only repay if you win your case. It’s not a traditional loan tied to your credit history and involves no monthly bills. Many people refer to this as “selling” their lawsuit informally, but legally it’s a funding agreement.

If you've agreed to receive periodic payments from a settlement—known as a structured settlement—you can sell some or all of those future payments. Structured settlements are designed to provide guaranteed payments over time, offering stability and predictable income after a legal claim is resolved.

If your structured settlement provides monthly payments, you can choose to sell all of them, a portion, or specific future payments, depending on your financial needs and court approval. Some agreements may also include life contingent terms, meaning payments continue only while you are alive, which can influence the sale value and approval process.

Legal transfers are called structured settlement factoring transactions and must be approved by a court to ensure it’s in your best interest.

Reasons for selling your structured settlement may include:

• Covering urgent medical expenses
• Paying off high-interest debt
• Investing in a home or business
• Handling emergencies or life changes

Courts require proof that the sale benefits you and won’t cause long-term financial harm.

1. Decide whether to sell all or part of your payments.
2. Request offers from multiple reputable buyers.
3. Contact more than one structured settlement purchasing company to compare rates, terms, and customer reviews before making a decision.
4. Review terms with a lawyer.
5. Attend a court hearing for approval. The judge will review your case to ensure the sale is in your best interest. You’ll receive written notification of your court date in advance, you or your authorized representative must attend with all required documents.
6. Receive a lump-sum payment after finalization.

The process always requires court approval, and in many states, a judge's approval is needed to finalize the sale.

Expect the process to take 45–90 days based on court availability and paperwork.

Buyers apply a discount rate (usually 9–18%) reducing your total return.

The discount rate directly affects how much cash you’ll receive compared to the total value of your future payments.

This calculation is based on the present value of those payments, meaning the money you receive now is worth less than the total you would collect over time. If your settlement includes life contingent payments, the valuation may be lower because the total payout depends on your lifespan.

• You may receive significantly less than the total future value.
• Loss of long-term income stream. Selling your settlement means giving up the guaranteed payments you would have received in the future, which can impact your long-term financial security. This risk is especially significant if your settlement includes life contingent payments, as selling them means forfeiting income for the rest of your life.
• Potential for predatory offers from unethical buyers. Always research factoring companies carefully to ensure they are reputable and offer fair terms.
• For minors, the process is more complex and requires extra legal oversight.

Before selling your structured settlement, make sure you understand the long-term impact on your finances.

When deciding to sell your structured settlement payments, it’s important to explore all available options so you can get the best value and terms.

The structured settlement payments selling process involves evaluating offers, understanding discount rates, and ensuring the transaction is approved by the court.

Not every buyer offers the same rates, fees, or level of service, so comparing offers is key.

Here are some of the most common selling options:

1. Partial Sale – Sell only a portion of your future settlement payments while keeping the rest as a steady income stream. This option helps you cover urgent expenses while preserving long-term financial security.
2. Lump-Sum Sale – Transfer all of your remaining structured settlement payments in exchange for one upfront lump sum. This can be useful if you need a large amount of money immediately, but it eliminates future income.
3. Selling Specific Payments – Instead of selling the entire settlement, you can choose to sell only certain scheduled payments (e.g., the next 5 years), then resume receiving the rest later.
4. Shop Multiple Buyers – Get quotes from several factoring companies to compare rates and terms before making a decision. Always ask for a competitor's quoted purchase price so you can use it as leverage to negotiate a better offer.
   Different buyers may offer different discount rates, so comparing at least three offers can help you get the highest payout.
5. Work With a Financial Advisor – An experienced advisor can help you decide which selling option fits your needs, whether you’re looking for quick access to cash or a balance between lump sum and future payments.

Always check the buyer’s reputation and ensure court approval before finalizing the sale. This ensures the transaction complies with the Structured Settlement Protection Act and protects your financial interests.

Explore these selling options carefully to find the one that offers the best balance between immediate cash and future security.

• Pre-settlement funding for immediate expenses without selling structured settlement payments.
• Negotiating a lump sum with the insurance company. In some cases, you may be able to work directly with your insurance company to arrange a one-time payment instead of waiting for scheduled installments.
• Personal or home equity loans.

The process and requirements vary depending on state laws, so always check local regulations before making a decision.

While you can’t sell your lawsuit outright, you can access money through pre-settlement funding or by selling structured settlement payments with court approval. Weigh the pros and cons carefully, and consult a legal or financial advisor before making a decision.