Here are the key situations when you should not sell a structured settlement (or should pause and think very carefully before doing so). This is general financial guidance—not personal financial advice.

When NOT to sell a structured settlement

1. When the lump-sum offer is far below the true value

Buying companies typically offer 20–70% of the present value of your payments.
If you’re being offered a large discount and have no urgent need, selling is usually a bad deal.

2. When the payments are your only reliable long-term income

If your structured settlement covers essentials—rent, food, healthcare—selling it can jeopardize your financial stability.
These payments are designed to support you over time; losing them may create future hardship.

3. When you’re under financial or emotional pressure

If you’re feeling:

• stressed,

• desperate,

• dealing with medical issues,

• in the middle of a divorce, job loss, or crisis,

your judgment may be affected. It’s often better to wait or seek neutral financial counseling first.

4. When you don’t have a clear, necessary use for the money

Selling is usually more expensive than keeping the payments.
Avoid selling if the lump sum would go toward:

• discretionary spending,

• impulse purchases,

• nonessential upgrades.

If you cannot articulate an urgent, important use, keep the settlement.

5. When the court approval process raises red flags

All structured settlement sales must go through court. You should not proceed if:

• the court hearing is being rushed,

• the buyer discourages independent legal advice,

• terms aren’t fully explained.

These are signs you may be getting a bad deal.

6. When fees or penalties are unclear

Avoid selling if you:

• don’t understand the discount rate,

• aren’t given a full breakdown of fees,

• see vague or confusing contract language.

Transparency is essential.

7. When selling may jeopardize government benefits

Structured settlements often don’t count as income for purposes of programs like:

• SSI,

• Medicaid,

• SNAP.

But a large lump sum does count and can cause you to lose eligibility.
If your benefits are crucial, selling is risky.

8. When you can sell only a small piece later if needed

You can usually sell just a portion of your future payments instead of all of them.
Don't sell the entire settlement if:

• you only need a small amount now,

• you want to preserve long-term financial stability to some degree.

9. When you haven’t consulted a neutral professional

If you haven’t yet talked with:

• a financial advisor,

• an attorney,

• a trusted, knowledgeable friend or family member,

it is often premature to sell.