Litigation glossary

Settlement Factoring

Selling your future structured-settlement payments to a company for immediate cash — almost always at a steep discount. Effective rates around 20% are common, and a court must approve every transfer.

Factoring companies advertise 'cash now' for structured settlements. The discount is the product: quoted rates run 9–18%, court testimony has documented 15.5–25% at retail, and roughly 20% effective is common — meaning sellers often receive a fraction of present value. In the documented worst case (Access Funding), lead-paint victims received about 30 cents on the present-value dollar.

Protections exist: 49 states have Structured Settlement Protection Acts, federal law imposes a 40% excise tax on transfers without a qualified court order, and a judge must find the transfer in your best interest. Our settlement-advance checker converts any offer into its effective rate before you sign anything.

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