Unnecessary Ways To Spend Your Lawsuit Loan

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A lawsuit loan is a non-recourse loan that you can use for just about any purpose. Whether you’re seeking to pay your medical bills, cover household costs, or rent, a lawsuit loan can help your financial situation while your personal injury case is active.

However, while a pre-settlement loan can be a versatile way to pay for your essential needs, there are things you shouldn’t spend it on. 

Here are four ways you should never use your pre-settlement cash advance on.

Buying or spending on things you don’t need

Spending your lawsuit cash advance on non-essential matters is not very smart. Legitimate funding companies dislike reckless spenders, and if they find out you are using your money on extravagance, they may not allow you to borrow money from your lawsuit again.

For now, it’s best if you stick to the basics while involved in a personal injury because they are necessary. Once you are in a more stable position with a fixed income and able to be up to date with your bills, consider building your credit; and getting back on track. 

Don’t get into debt you can’t afford or buy things you do not need to have with little or no income during a legal battle you don’t even know you will win. No settlement is ever promised.

Keeping the money saved in the bank 

You may qualify for a lawsuit loan—from a few thousand dollars to $1,000,000—but to let it sit at the bank as savings may not be the best idea. Interest rates of the loan do accrue, and once you receive your compensation, you will have to pay that money back—plus interest. That means saving your lawsuit loan money will only cost you more once you successfully conclude your case.

If your goal is to have money saved for a rainy day, consider saving your money once you resolve your case and get paid. You can always re-apply for a lawsuit loan to get additional funds when that rainy day comes. 

Buying a pet 

Generally speaking, buying a dog is not what a lawsuit loan should be used for. Plus, if you are using a settlement advance to buy a pet, how will you care for the pet once the money is gone?

Understandably, accidents cause much anxiety and the need to hold on to a healing someone. However, buying a pet while you are involved in a legal matter and are stressed only hurts your pockets and shelter dogs. As animal lovers, we understand that buying a dog means another dog is getting euthanized. 

The good news is that there are many shelters and rescue groups that help homeless, unwanted, previously injured, and abandoned animals in need. Sound familiar? Try rescuing your best friend instead of buying to bring healing during your personal injury, and in return, you will bring healing back to them from their past. 

But before you do that, ensure to educate yourself on the matter and that you have a fixed income to provide for them. Animals do feel and should be treated humanely. 


Most settlement lenders prohibit using a lawsuit loan on gambling. That’s because taking out a settlement loan to gamble can have consequences for you and the lender. 

No matter your excuse, gambling is never a good idea. There is a difference between helping a victim that needs funds to cover living expenses and using the funds to fulfill negative habits.

Additionally, taking on a cash advance in the form of a lawsuit loan to gamble could throw up a red flag to the funding company that you might not settle your case due to your impulses.

Illegal activities

When you take out a pre-settlement loan, funding companies will likely have a clause that specifies that you can’t use the advance for illegal activities. Most legal funding companies won’t fund a civil for illegal purposes. Some of these activities include money laundering, buying drugs, or being involved in other types of crimes. 

Ultimately, litigation funding companies will not provide loans for illegal purposes, or they could face legal problems. They will not risk losing their investment and getting in trouble with authorities.


Is a pre-settlement loan necessary when you’re strapped for cash and need to pay rent or medical bills? Yes.

However, your lawsuit loan should not be used on things you do not need. Using the cash advance for purposes such as illegal activities or non-essentials could result in the lender not providing you with money. Plus, they’ll alert other legitimate funders that you are an irresponsible borrower.

While some pre-settlement funding companies may be more lenient on the use of the advance, you should always use precaution.

If you need a lawsuit loan to pay your medical bills or cover your daily costs, apply for a pre-settlement loan with Baker Street Funding today.

At Baker Street Funding, we give you the inside scoop on pre-settlement funding by covering a variety of ... financing and legal topics to help you made the best financial decision for you and for your case. Our experts break down complex ideas in a way that's easy to understand so you can stay informed on current trends as well as tips and fact checked information by the CEO and founder, Daniel Digiaimo. Furthermore, Despite its name, consumer legal funding is not a loan. If you don't win your case, no payment needs to be made back. To avoid confusion and simplify matters on, we'll use the word "loan" throughout this article.

About Baker Street Funding

Baker Street Legal Funding helps plaintiffs and attorneys achieve financial ease during litigation through our non-recourse funding products. Our services give out thousands of clients fast access to tools and transparent information so you can get the needed funds with competitive rates. Baker Street Funding approval methods come with critical essentials for getting ahead fast, including larger approvals in connection to a thriving funding team of like-minded people. 

For more information, visit bakerstreetfunding.com/about/

* This post is for educational and informational purposes only. Please consult your attorney and your financial and tax advisors before making any decisions. Terms and conditions can be found at bakerstreetfunding.com/privacy-policy

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