If you’re thinking, “What should I do if I have a structured settlement and I need cash now?” you’re not alone. A quick answer is to review your settlement agreement, speak with a financial advisor, and consider whether selling structured settlement payments or seeking pre–settlement funding fits your needs.
Pegasus Legal Capital offers non-recourse funding, meaning clients do not have to repay unless they win or settle their case, which removes personal liability for the borrowed amount. Personal injury pre-settlement funding can provide peace of mind while waiting for a lawsuit to resolve.
Understanding Your Structured Settlement: A Quick Primer
Understanding how structured settlements work is the first step to deciding whether selling payments or seeking a lump sum makes sense for your financial situation.
What is a Structured Settlement?
A structured settlement is an agreement that provides income through regular payments after a personal injury, wrongful death, or other civil case lawsuit. These payments are often arranged through an insurance company and can be tailored to cover long-term financial needs.
Structured settlement annuities may include:
- Guaranteed payments over a set period
- Life-contingent options that last for the claimant’s lifetime
- Funds designated for a beneficiary, such as a spouse or minor
While they can provide financial security, taking time to review these options with a financial advisor or attorney can help ensure you make decisions that match your personal goals and protect long-term stability. However, they sometimes fall short when unexpected expenses such as medical emergencies or college tuition arise.
For many claimants and annuitants, selling structured settlement payments or transferring payment rights can offer flexibility to meet financial goals. This process typically involves court approval to protect the customer’s long-term interests.
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Facing a Financial Hurdle with Your Structured Settlement
Structured settlements can provide long-term security, but they may not always match the pace of urgent financial needs. It is important to understand what structured settlement loans are and how these transactions differ from pre–settlement funding.
The Urgency of the Situation
Life does not always follow the payment schedule of your structured settlement. Urgent expenses like mortgage payments, car loans, or medical bills may create pressure to access cash sooner.
In these moments, individuals consider a lump sum payment by selling structured settlement payments. Factoring companies purchase payment streams, offering immediate funds, though the lump sum reflects a discount rate that takes into account interest rates and market fluctuations.
While selling structured settlement annuity payments can help with financial emergencies, the court order process ensures a judge reviews the case, protecting against predatory lending and helping secure long-term financial stability.
Common reasons people choose to sell include:
- Covering medical emergencies or ongoing bills
- Paying for home improvements or repairs
- Handling tuition or education costs for a minor or beneficiary
- Paying down high-interest debt or a mortgage loan
- Managing unexpected financial obligations with security
Adding all of these factors together, selling payments can provide short-term relief, but it is important to weigh the benefits against the long-term security a structured settlement provides.
Pre-Settlement Funding – What Is It and How Can It Help My Situation?
Pre-settlement funding provides access to money while a lawsuit is still pending. For claimants facing medical bills, home repairs, or legal expenses, this option can bridge the gap before a settlement agreement is finalized. It is often used in personal injury, wrongful death, or medical malpractice claims.
One of the first questions that may arise in a situation like this is whether pre-settlement funding is considered a Loan. Unlike traditional loans, pre-settlement funding is non-recourse. This means there is no collateral, no impact on your credit score, and repayment only occurs if you win or settle your case.
How the Process Works
- Application process: The claimant submits details about the case and structured settlement agreement to a funding company.
- Case review: Attorneys and funding specialists review documents, payment rights, and the likelihood of recovery.
- Discount rate evaluation: The funding company calculates present value, effective discount rate, and market fluctuations before making an offer.
- Court hearing: In structured settlement factoring transactions, a judge may hold a court hearing to verify that the transfer is in the claimant’s best interest.
- Disbursement: Once approved, the lump sum is disbursed, giving immediate access to cash for urgent needs.
Pre-settlement funding can be a valuable resource for covering attorney fees, high-interest debt, mortgage payments, or other financial goals. With court approval and oversight, it is designed to balance short-term needs with long-term financial security.
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Contact Pegasus Legal Capital to Understand Your Options
Selling structured settlement payments or seeking pre-settlement funding is a serious decision that involves court hearings, independent professional advisor reviews, and careful financial planning.
Pegasus Legal Capital can help explain structured settlement transfers, the court process, and funding options. With non-recourse funding, you gain access to support without personal liability, giving you space to focus on recovery and your financial goals.
Whether you are dealing with medical bills, mortgage concerns, or planning for college tuition, understanding your options can provide a path toward long-term financial security.
Your pre-settlement funding consultation is free — contact us today!