There are fewer routes from a settlement to cash than the advertising suggests, and one of them is usually cheaper than the one being advertised. This page sets out what actually exists, in the order a careful person would price them, before anyone signs a transfer agreement.
The routes that exist
A full transfer sells every remaining payment. A partial transfer sells a defined block and leaves the rest. Both require the same court approval and both cost you the discount on whatever is sold. What does not exist, despite the name, is a loan secured on the payments: the settlement agreement and the statutes make the payments hard to pledge, which is why firms that advertise loans against settlements are in practice offering to buy payments.
Pricing them against each other
The gap between the face value of the payments you sell and the money you receive is the discount, and it is the whole price of the transaction. The trade body's reported range is between 9% and 18%, and a few points over a long stream is a very large sum. Florida's statute names the yardstick a court measures it against: discounted present value is the fair present value of future payments, determined by discounting them using the most recently published applicable federal rate.
The federal rule that makes it universal
Congress made the court step effectively compulsory without legislating for state courts at all. a federal excise tax falls on a person who acquires structured settlement payment rights in a factoring transaction unless the transfer is approved in advance in a qualified order, and the section is quoted in full on the United States row of the record: a final order, judgment or decree finding that the transfer does not contravene any federal or state statute and is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
Questions people ask about structured settlement cash
Does a court really have to approve this?
Yes, in every state. The federal exception in 26 U.S.C. 5891(b) applies only where the transfer was approved in advance in a qualified order finding it is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
What is the single biggest variable in the price?
The discount rate, and after that how far in the future the payments fall due. The reported range across the market is between 9% and 18%.
Do you take a share of what I get?
No. Buyers pay a flat fee for the enquiry itself, never a share of the discount and never anything contingent on a transfer completing.