Article: Selling Your Assets - What to Expect

Preparing Your Documents and Understanding Your Asset

When you’re looking to sell a settlement, lottery prize, annuity, structured settlement, or any similar asset, the first and most critical step is to gather every piece of documentation that proves ownership and value. Start with a clear list that will keep you organized: the total amount awarded, how much has already been paid out, the remaining balance, the payment schedule, the exact dates of upcoming disbursements, and the specific amount you’re hoping to receive from a funder. This inventory will be your roadmap for the entire process.

Next, dig into the case paperwork. Look for the official court judgment or award notice, any court docket entries, the payment schedule or instalment plan, and any medical records or expert reports that support the injury or claim. If the asset is tied to a structured settlement, locate the settlement agreement and the servicing company's contact details. Having these documents in order saves time later, and shows potential funders that you’re serious and organized.

The payment schedule is a key piece of evidence. Funders need to know when they’ll receive the full payout and how that timeline aligns with their own liquidity. Write down each payment date, the amount, and any conditions that could affect the schedule - like a clause that delays payment if a certain event occurs. If your payments recur monthly or quarterly, note the exact day of the month or the trigger event for each instalment.

Assess the remaining balance carefully. If you’re still receiving instalments, calculate how much is left to be paid out in total. Multiply the number of remaining payments by the amount of each payment to get a simple figure, then compare that figure with the settlement’s original value. This comparison gives you a realistic view of the asset’s worth and helps you set a realistic funding request.

Attorney information is essential. Write down your lawyer’s name, phone number, email address, and any other contact details. If you don’t have a lawyer, you’ll need to explain how you’re representing yourself. Funders will want to verify the legal ownership of the asset, and having an attorney’s confirmation speeds that process.

Once you have all documents, you’ll receive a packet of forms from the funder’s lawyer or the funding company. These forms typically request the same details you’ve already organized: payment schedule, total value, remaining balance, and lien information. Your lawyer - if you have one - should review each line for accuracy and fill them out. If you’re representing yourself, read the forms thoroughly before signing. Any missing or incorrect information can delay funding or cause a funder to pull out.

The timeline for receiving funds is variable, but you can get a rough estimate. If the asset has already been awarded and is simply awaiting payout, a funder can often close the deal within a few days - sometimes as little as two or three days after receiving the paperwork. For pre-settlement cases or assets that will take months to clear, the funding window can stretch to one to three weeks. Understanding these timelines lets you plan your cash flow and avoid unnecessary stress.

After the paperwork is submitted, the funder will evaluate the asset’s risk and value. They’ll verify that no other liens exist and that the asset is legally yours to sell. Once cleared, the funder will provide a funding offer, which may be presented in a single offer or a schedule of how much you’ll receive now versus how much you’ll get later. Reviewing this offer with your lawyer - or a financial advisor - helps you spot any hidden terms or unfavorable conditions before you commit.

Choosing a Funder, Managing Fees, and Avoiding Scams

Selecting a reputable funder is a decision that can affect your financial future. Start by researching firms that specialize in settlement and annuity funding. Look for companies that are licensed, have clear customer reviews, and provide transparent fee structures. A credible funder will disclose all costs upfront, including any interest, discount rates, or service fees, so you can compare offers objectively.

Fees can vary widely. Many funders use a discount rate approach - essentially borrowing against the future payout at a set interest rate. Typical discount rates range from 15% to 25% of the total settlement, applied over the life of the loan. Others may offer a flat fee or a percentage of the amount paid out. The key is to understand how the fee is calculated and how it will impact your net proceeds. Some funders add an upfront service fee, while others only charge interest on the amount financed. Ask for a written breakdown that shows how each fee is applied.

Nonrecourse funding is common for pre-settlement cases. Because the lender’s risk is limited to the settlement amount - if the case fails, you don’t owe them - these loans often carry higher fees. Nonrecourse loans protect you from personal liability, but they can come with stricter qualifying criteria. The lender will evaluate the strength of the case, the likelihood of a favorable outcome, and any potential insurance coverage. A strong, well-documented case is your best bet for securing a lower discount rate.

Before signing, compare at least three funding offers. Some firms advertise low rates but add hidden costs. A quick look at the annual percentage rate (APR) can help you gauge the true cost. Don’t let a single firm’s promise of the lowest fee win you over; instead, weigh the entire package - including eligibility criteria, payout speed, and after‑service support.

Beware of red flags that signal a potential scam. A funder who demands payment before providing a written offer, or who insists on a lump‑sum payment without explaining the terms, should be approached with caution. If the paperwork lacks a clear deadline for payout or contains vague language about “future payments,” it’s a warning sign. Always keep a copy of the signed contract and review it with a trusted professional before moving forward.

Infomercial‑style brokers sometimes claim they can secure large commissions for each sale - sometimes $5,000 or even $30,000. This structure can inflate the total cost beyond the funder’s fee, leaving you with less money than you expected. A reputable broker will have a clear fee schedule and a transparent relationship with the funder. If a broker’s commission feels excessive, negotiate or walk away. A lower commission usually means the funder will offer you a more favorable discount rate.

After you choose a funder, ensure the contract includes a precise payout deadline. If the funder fails to pay within the agreed timeframe, you have the right to pursue legal action. Make sure the contract lists all parties, contact information, and a clause that allows you to terminate the agreement if terms are not met. This level of detail protects you from vague or unenforced promises.

Maintain regular communication with the funder throughout the process. Ask for updates on your application status and request documentation whenever a payment is made or a new payment schedule is confirmed. By staying engaged, you’ll spot any delays early and can take corrective action before they compound.

Making the Decision and Adjusting Expectations

Deciding to sell a settlement or annuity is a significant financial move. Evaluate whether the immediate cash you’ll receive outweighs the long‑term value of the full payout. If you need funds quickly - for a debt, medical expense, or emergency - accepting a lower net amount may be worth the convenience. If you have time to wait, you could hold onto the asset until it fully matures, avoiding the discount and any loan interest.

When reviewing the funder’s offer, calculate the net amount you’ll actually receive. Subtract the total discount, fees, and any interest from the settlement value. Compare this net figure to the amount you need now. If the net is significantly lower than your target, consider negotiating a higher payment or looking for a different funder. Keep in mind that some funders may offer a higher upfront amount in exchange for a longer repayment period; assess how this will affect your cash flow.

Adjusting your mindset is essential. The amount you initially hoped for is often an idealized figure that doesn’t account for discounting, legal fees, or other costs. Reframe the settlement’s value as the potential cash you can access today, and view the funder’s offer as a realistic compromise. This perspective reduces disappointment and helps you make a more rational choice.

Prepare for the post‑funding phase by setting up a budget that accounts for the new cash flow. If you’re using the money to pay off debt, outline a repayment plan that takes into account the lower balance after the funding fee. If you’re investing the funds, research reputable options that align with your risk tolerance and time horizon.

Finally, keep a record of all documents, contracts, and correspondence related to the sale. These records will be useful for tax purposes, future legal disputes, or if you decide to refinance or negotiate with a different funder. A well‑maintained file also serves as a reference point if you ever question the fairness of a funding deal.