Consumer Advocacy
What you need to know
Structured Settlements
  • Always get independent legal advice before selling your settlement 
  • Structured settlement laws vary from state to state 
  • Make sure to ask about what your “effective rate” will be before you decide to sell
  • Always get multiple quotes to ensure you get the best deal 
Our Approach

How We Analyzed Structured Settlement Companies

Company Reputation
In addition to customer reviews, we looked at each company’s recent history to assess what—if any—litigation or regulatory actions they might have been involved in..
Customer Support
We feature companies that offer multiple means of customer support.
Educational Resources
We preferred companies that provide plenty of educational material to make sure consumers make an informed decision.
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We receive compensation from these partners, which impacts the order they appear on the page. That said, the analyses and opinions on our site are our own and we believe in editorial integrity.

Top Structured Settlement Companies

DRB Capital review

DRB Capital was founded in 2013. The company features a live chat, Spanish-speaking representatives, and an email address where you can contact them, if you prefer not to make an initial call. DRB Capital also claims to provide a single point of contact, so that you won’t be shuffled back and forth through different representatives if you choose to do business with them. Instead, a single specialist will walk you through all your questions each time you call. If you sign a contract with the company and all requirements and conditions are fulfilled, but your transaction is not funded, DRB claims it will pay you $25,000.

DRB has also tried to establish itself as a legitimate enemy of predatory factoring companies by providing a tip line where anyone with information can come forth and denounce another company. This tip line has a private fund and comes with a bounty award totaling up to $100,000. So far,  two payouts have been awarded since the program’s inception in 2018. 

J.G. Wentworth Structured Settlements review

J.G. Wentworth is one of the oldest and best well-known factoring companies in the United States, thanks to having been in the financial market since 1991 and on having focused on the purchase of annuities for the past 25 years. On their website, there’s step-by-step information on how to go through with the process of selling your structured settlement, and a glossary explaining the most common industry terms. With J.G. Wentworth you have the option of selling all, half, or a portion of your structured settlement. The company claims to have purchased over 8 billion dollars in future payments. 

It should be noted that J.G. Wentworth has been involved in several recent lawsuits. In 2019, a Missouri man began proceedings to sue the company for an alleged violation of the Missouri Structured Settlement Act, the Missouri Merchandising Practices Act, and “fraudulently advising him to use an attorney who was not disinterested counsel.” In 2015, the company was involved in another lawsuit regarding the violation of antitrust laws. This instance involved a merger between JG Wentworth and another giant in the factoring business, Peachtree Financial, and according to the lawsuit, “judges had been making decisions on the companies’ settlement transactions without being told they were the same entities.” Finally, as recently as February 2020, the company has been involved in a class-action lawsuit involving the violation of the Telephone Consumer Protection Act. This lawsuit claims the company “illegally used an auto dialer to send out marketing texts without obtaining permission from recipients.” The company has also filed for bankruptcy twice in a span of 9 years.

Fairfield Funding review

Atlanta-based Fairfield Funding has been in the industry of purchasing structured settlements since 2009. They have a live chat on their website, as well as an email and phone number for immediate questions. Their website also includes a list of all their employees along with detailed bios.

Fairfield Funding is a member of the National Association of Settlement Purchasers (NASP) and keeps a tally of their monthly funded transactions on their website. The company claims that “in almost all cases, there are no fees for you” and claims to pay “your notary fees, legal costs, and court filing and processing costs.” Fairfield Funding also has a vast resource center with up-to-date articles related to the business and process of selling structured settlements. Additionally, the company offers a $500 referral fee for anyone that refers customers to them that actually completes a transaction.

Our Research

More insight into our methodology

Although the industry of selling annuities is fairly regulated and governed by state laws, there is still a lot of controversy surrounding these types of transactions, especially since many times they involve vulnerable populations. Reports of companies engaging in telemarketing harassment and even poaching potential sellers from other companies are rife and have been around for years.

In fact, in our case, when we tried contacting these companies to find out more information about their services, one of them emailed us at least four times. In his emails, the company's rep—who had attached "read receipts" to the emails—told our writer that he'd seen she had opened the emails he sent, and continued to ask whether she wanted to discuss business opportunities with them further. The emails only stopped once an editor stepped in (although he did answer our editor at least once). We did not include this company in our list precisely for this reason—if they were this persistent with us, a media outlet, we can assume they would be much more insistent with someone looking to sell their settlement. 

For this reason, we focused primarily on describing what the process of selling your structured settlement is like and what are some things to expect if you decide to do so. Since a lot of these companies offer similar services on their webpages, we tried to focus on the aspects that make them stand out.

Many of these companies have a similar web layout. They prominently feature a phone number where you can call to get a quote of what your lump sum would be, and they provide a brief overview of what the selling process will be like. Also, most factoring companies, including those we highlighted, offer similar options for selling your structured settlement. That is, you can sell all, half, or a portion of your payment. 

Although we ultimately chose not to recommend any one company because of the controversies regarding these types of transactions, we did look at what made these types of companies, known as factoring companies, stand out. We considered the educational resources posted on their webpages, as well as their customer support options to see if they had more than one communication method. Finally, we ran general media searches to verify the company’s reputation in the industry, checking to see if they had any past or current lawsuits or debts. It’s important to note that larger companies will almost always receive more media scrutiny, so it’s easier to determine whether or not they've been embroiled in controversy or financial trouble. On the flipside, smaller companies often receive limited media coverage, so there won’t be as much information about potentially harmful or dubious practices online. Moreover, as in the case of J.G. Wentworth and Peachtree Financial, some companies might actually be mergers or exist under a broader parent company, so research into one company might be incomplete or misguided (i.e. one company seems to have had no run-ins with the law, but in reality all claims against them are under the parent company’s name). You should always keep this in mind when conducting your own research on these companies.


Company Reputation

Doing a careful background search on a company you’re thinking of doing business with is a crucial part of selling your structured settlement. We searched online media to find any pending or past lawsuits or bankruptcies these factoring companies may have. You should always have an overall idea of the kind of company you’re dealing with, and if it’s had past controversies that could influence your decision of doing business with them.


Customer Support

Most factoring companies will noticeably display a phone number you can call to receive a quote, right on the company website home page. However, because this industry has been known to engage in persistent contacting behavior in the past, (especially regarding constant calling) we tried to look at alternative contact options that don’t require you using your phone number until you’re ready. Some companies don’t offer any of these, but others offer live chats or email options where you can reach out to representatives.


Educational Resources

The process of selling your structured settlement can be confusing, especially because laws dictating this process vary state by state. Because many factoring company websites often provide very similar or bare bones information regarding their own process, we looked at how much educational resources regarding structured settlements they provide on their websites. Some companies have blogs where they constantly offer updated information on the industry. Others have glossaries and resource databases where they offer a closer look at the history and process of selling your structured settlement. 

Helpful information about Structured Settlements

Structured Settlements 101

What are Structured Settlements?

Structured settlements, also sometimes referred to as annuities, are periodic payments that one entity makes to an individual in order to cover damages they’ve suffered. This kind of transaction really gained traction in the 1970s, when it began to be used as a legal remedy for personal injury and wrongful death lawsuits. After 1982, the practice of opting into these kinds of settlements increased when Congress granted tax exempt status to all structured settlements.

Lawsuits that have been “settled,” for example, usually result in the wronged party getting a fixed amount of money in the form of structured settlements or lump sum payments. With a structured settlement, the money an individual is awarded is stretched out over a fixed time period. Many times, these payments can be scheduled to be distributed across the person’s entire lifetime.  Moreover, structured settlements yield interest over time in order to account for inflation, meaning you’ll actually earn more money as more time passes. In turn, an individual who opts for lump-sum payments receives all the awarded money at once. In the United States, there are some specific kinds of cases that allow you to choose between receiving an annuity versus a lump sum payment. Personal injury cases, such as pharmaceutical injury and product liability cases, are an example of this.

Structured settlement agreements can be some of the most flexible plans prior to the striking of the deal, adjustable to your specific financial needs because of the various existing payout options. For example, how and even when you decide to receive your payments can be formulated around your specific needs. You could receive lower amounts at the beginning of your payments or have them increase over time. You can even defer your payments for a number of years in order for them to accrue interest and then receive a higher overall payment.

These are just some of the many reasons why sticking with your structured settlement may be the best option, albeit not always the most convenient. People who receive guaranteed annuities for life, for example, can always rely on a steady monthly influx of money to cover their medical bills and other expenses. In many cases, this money will also be guaranteed for life, so the individual can always rely on this fixed amount if they lack other sources of income. This structured option also prevents someone from pursuing unnecessary or reckless spending of their settlement money, as may be the case if a person receives large amounts of money at once.

However, after you opt into a specific structured settlement plan it’s extremely difficult to change the terms, and you’re pretty much locked into your settlement terms. Asking for advances before a scheduled payment can result in costly surrender charges and IRS penalties. At some point, the scheduled payments may not be enough to cover all costs, or an unexpected event—such as a worsening medical condition or mounting debt—may require that you cash out a large sum of money at once. In these cases, selling part or even all of your structured settlement may be a tempting option. 

Who Sells Structured Settlements and Why?

When you sell your structured settlement, you’re essentially transforming your settlement money into a lump sum, either wholly, or partially. This is good if you find yourself cash-strapped during a costly emergency, or if you have legal and medical debts you want to take care of.

Common reasons for selling your structured settlement:

1.     You want to pay off student loans

2.     You need to pay off credit card debts

3.     You need to pay off medical and/or legal bills

4.     You want to buy a house or a car

5.     You want to invest your money (for example, want to start a business)

Although this large cash injection may seem attractive at first glance, selling your settlement money has quite its share of drawbacks. For example, it’s easier to misuse, and even blow through your money, if you have access to it all at once. At the same time, you’re giving up the safety net  of a steady payment, which is especially meaningful if you have no other source of income. 

Most importantly, selling your annuity means getting less money in the long run, since structured settlements usually yield more than a lump sum payout because of the interest the annuity may earn over time. In the past, some companies have been known to buy settlements for pennies on the dollar, so you need to make sure that the offer they’re making you is the maximum lump-sum you’re able to receive.   

It’s important to note that the type of annuity you currently have will also influence whether you’ll have to pay taxes on your lump sum once you sell it. In cases of personal injury and wrongful death lawsuits, the settlement money will always be tax exempt (this tax exemption also applies to interest and dividends earned by funds in structured settlement accounts).  Any subsequent sale of these structured settlements will also be tax exempt, as long as the sale complies with the law. Similarly, worker compensation claims that involve physical injuries or illnesses are also tax exempt and selling them will also result in tax exemption. However, if you received a structured settlement because of any other kind of lawsuit, the settlement and its future sale could be taxable. 

A brief look at Factoring Companies 

Companies that specialize in buying out structured settlements are called factoring companies. These types of companies often buy different kinds of annuities, not just structured settlements. Although the Structured Settlement Protection Act of 2002 went into effect precisely to protect the rights of individuals who choose to sell their settlements, the industry is still plagued with problems.  Some of the biggest factoring companies have been involved in lawsuits regarding predatory practices. For instance, in 2015 the Washington Post released a series of articles exposing the controversial practices of some of these companies. One of the most shocking tales was that of Terrence Taylor, a man with a $31.5 million structured payout, who in 2014 sold everything owed to him up to the year 2044  and became “broke and homeless.”  

However, the 2002 Structured Settlement Protection Act standardized the largely unregulated practices of these companies, so that now there are some basic requirements all individuals and companies have to abide by if they want to complete this type of transaction. Although each state except for New Hampshire has specific guidelines on how these kinds of transactions can transpire (called State Structured Settlement Protection Acts or “SSPAs”), there are some standard requirements established by the 2002 Structured Settlement Protection Act: First, the transaction has to be approved by a judge, who will decide whether the transaction is fair and in the best interest of the person who wishes to sell the settlement. Second, a 40% tax is imposed on settlement purchases that don’t follow state law.

However, States have different laws for how these types of transactions should occur, so it’s important to get a legal expert who is knowledgeable about the specific laws of your state. 

So, how does the process work?

Although the details of how to carry out sales of structured settlements vary from state by state, selling structured settlements is a pretty straightforward process.

You will first need to get a quote from the factoring company where they’ll tell you what you can expect to receive depending on how much of your settlement you choose to sell.

The company will then provide you with a “discount rate” which is a percentage that determines the present value of your settlement. These rates can be as low as 7% or as high as 29% and they represent the amount that will be discounted from your settlement. If a company offers you a 15% discount rate, and your settlement is worth $200,000, then the amount you’ll receive in your lump sum payment will be $170,000.

However, your lump sum could likely be less than that due to administrative fees and other costs related to the transaction. For this reason, you should always ask for the “effective” rate which takes all these extra costs into account.

After you’ve come to an agreement with the company, you’ll need to appear before a court in order to get the transaction approved by a judge. This is a required step in every state and it obligates the judge to approve or deny the transaction using  the “best interest” standard. This means the judge will ask you certain questions to ensure you know what you’re getting into, as well as to confirm that the transaction benefits you and any family members or dependents who may be affected by the deal. Once the judge approves the transaction it’ll take approximately 45-90 days to sell your structured settlement. Some companies do offer cash-advance payments, so you should inquire about this if you’re in need of cash immediately. 

The Dark Side of Factoring Companies

It’s important to be aware of the controversies surrounding the structured settlement purchasing industry. Although the industry is much more regulated than it was before the Structured Settlement Act of 2002, there are still issues that continue to be a source of controversy.

One of the most prevalent problems surrounding factoring companies is the predatory practices associated with them. Reports of constant telephoning and pressuring people into selling their structured settlement are fairly common across the board. These claims portray a clear picture of companies taking advantage of people’s vulnerabilities. Some of these companies have also been accused of violating the Telephone Consumer Protection Act, which limits the use of pre-recorded voice messages, automatic dialing, and SMS for telemarketing purposes.

Rhonda Bentzen, president of the purchasing firm Bentzen Financial told us by email that phone harassment is common and persistent. 

“Multiple firms harass these annuitants with relentless phone calls daily, all hoping to find one in a moment of weakness.”

It’s also been reported that some companies actively search for recipients of structured settlements. In part, this also happens because if you do business with one factoring company, nothing prevents you from doing business with another in the future, so companies will try to gain information on who these customers are to try to poach them. Bentzen claims that a practice called “court record scraping” could be to blame for many of the ethics problems that plague the industry.  “Legal database companies allow these factoring firms to scour their databases for potential annuitants even though this activity is generally in violation of their terms of service,” she says.  In 2015, the House Committee on Oversight and Reform led an investigation on companies that locate and directly contact structured settlement recipients. These investigations ultimately led House democratic leaders to require then Internal Revenue Service commissioner John Koskinen to provide additional information into how the IRS monitors structured settlement transactions. In 2019, a bill that would allow claimants in civil court to retain a structured settlement broker that would negotiate their payments was introduced in the House, but ultimately did not materialize.

Finally, as was illustrated in a 2015 Washington Post article, some companies will try to persuade potential buyers into completing transactions outside of their counties of residence in order to take advantage of less stringent laws. Bentzen was clear that you should always pay attention to this fact, “don’t ever let a firm talk you into doing the transaction outside your county of domicile. We call this forum shopping and the aim is to find a venue with less oversight.” 

Things to Consider Before Selling your Structured Settlement

By far, the most important thing to do before making a decision on whether to sell part or all of your settlement is consulting with a lawyer and financial planner—that don’t work for the factoring company—to see what your alternatives are. This is essential to ensure you don’t get tricked or pressured into making a deal that ultimately is not the most beneficial for you. Some states require that you get legal consultation before going through with a deal, but even if that’s not the case, you should aim for independent consultation.

Additionally, you should always try and shop around to see what company provides the lowest discount rate, and lowest fees. Just because a company claims they’ll give you the maximum payout sum, doesn't necessarily mean they’re being truthful.

Here's a brief checklist of points you should consider before deciding to sell:

Possible Tax Consequences

Remember that some annuities and structured settlements could become taxable after you sell them. A very large lump sum could bump you up into a higher tax bracket,  and you will be taxed accordingly.

State Laws

Besure to review what the State Structured Settlement Protection Acts in your state are. You should always get legal advice before making any official decisions, but check  your state’s laws so you know what protections apply to you as a seller.

Company Reputation

You should perform your own research into the company you’re thinking about doing business with. According to the Federal Trade Commission (FTC), your local consumer protection agency or your state Attorney General’s Office can tell you if any complaints have been filed about the company.


FAQs about Structured Settlements


If I received a structured settlement as a minor when can I sell it?

If you were awarded a structured settlement as a minor, you are able to sell it when you turn 18 years old. Before then, parents are not allowed to sell their child's structured settlement because it is understood that the settlement was structured in order to protect the child's best interests and provide a steady source of income to meet his or her needs while growing up. A judge will only approve the sale of a minor's structured settlement if the parents have an urgent need to sell it and if selling it would be in the child's best interest.

Do I need a lawyer to sell my structured settlement?

You do not necessarily need a lawyer to sell your structured settlement, but it is highly recommended. Some states require by law that you have "independent legal advice" when you sell a structured settlement, meaning that you cannot consult the company's lawyer. Some of these states are Alaska, Delaware, Louisiana, Maine, Maryland, Minnesota, North Carolina, and Ohio. Other states do not require it, but it is a good idea to retain your own lawyer to guide you through this process. The sale of structured settlements requires a judge's approval during a court hearing, and an attorney could give you advice on the fairness of the sale, among other things.

Does selling a structured settlement effect my Medicaid eligibility?

Since a structured settlement is considered an asset, you could lose your Medicaid eligibility when both receiving a structured settlement and selling it. To be eligible for Medicaid, applicants must be below a certain level of income as determined by the state that administers the program. When you receive a structured settlement, the money you are paid periodically may put you above that income level. If it does not, selling your structured settlement and receiving a larger lump sum might.

What are the tax consequences of selling a structured settlement?

The tax consequences of selling a structured settlement will depend on why the settlement was awarded in the first place. If your structured settlement was part of a personal injury lawsuit, the settlement is tax-exempt, and so is the lump sum you will receive if you sell the structured settlement. However, if you received the structured settlement because of any other kind of lawsuit, the settlement and its future sale are taxable. Since almost every state has passed a structured settlement protection act, the state tax consequences may vary depending on where you live, so you should speak to an attorney or tax specialist to make sure whether the sale of your structured settlement is taxable or not.

Do I have to sell my entire settlement?

You don't have to sell your entire settlement. Structured settlement companies are willing to buy a certain number of settlement payments, such as the next 10 payments. They will also buy portions of each payment, which allows them to receive a percentage of each future settlement payment while you keep the rest.

What is a structured settlement?

A settlement is a legal agreement with which the parties in a lawsuit agree to resolve the case in exchange for something, usually a sum of money. With a structured settlement, the settlement money is paid in periodic payments over a specific period of time instead of as a single lump sum payment. Structured settlements are commonly the result of personal injury lawsuits. The payee-the person who receives the settlement-can transfer his or her payment rights to a company that buys structured settlements and receive a reduced lump sum.