Financing

The nature of structured settlements requires people to wait to obtain funding. However, there are options to cash out or obtain a cash advance on one's structured settlement. Various legal financing companies can offer to buy part or all of one's structured settlement (or other fixed annuity payments) in return for a lump sum cash upfront. Basically, such companies allow one to switch, for example, a structured settlement payment of over 20 years to one (lesser-valued) payment now. Such financing can be used to pay for a house, send a child to college, or pay off one's debts. Such financing will need the approval of a judge and the insurance company. [11][citation needed] In 2012, a Tennessee Chancery Court issued an order denying a payee's transfer of workers' compensation settlement payments under a structured settlement agreement. Judge William E. Lantrip held that (i) workers' compensation payments are not within the definition of "structured settlement " under the Tennessee Structured Settlement Protection Act, Tenn. Code. Ann. §47-18-2601 [12]

A purchaser of a structured settlement is an individual or company who buys a pre-existing structured settlement. Such settlements might include payouts for lottery winnings or annuities. For example, a court ordered structured settlement pays $5,000 a year for twenty years. The recipient doesn't want to wait for twenty years to receive their money so they approach a purchaser. The purchaser offers them $50,000 cash. The seller receives less money than they would if they waited twenty years, but they receive the money immediately.