If you’re involved in a lawsuit, the last thing you need is added financial stress. Legal battles can be long, and while you wait for your case to resolve, your bills won’t wait. Lawsuit funding agreements offer a solution by giving you access to the money you need now, rather than waiting for your settlement to come through. But what exactly are they, and how do they work? Let’s break it down.

How Do Lawsuit Funding Agreements Work?

A lawsuit funding agreement is a financial arrangement where a third-party company provides you with funds to cover your expenses while your case is pending. Think of it as getting an advance on your settlement money, just like you might get an advance on your paycheck. But here’s the key difference: with lawsuit funding, you only pay it back if you win your case.

These agreements are non-recourse, meaning you don’t have to worry about repaying the funds if you don’t win. The funding company takes on the risk, not you. This critical distinction sets legal funding apart from traditional loans, which require repayment regardless of the settlement outcome.

What’s Included in a Lawsuit Funding Agreement?

Figuring out a legal funding agreement can feel a bit daunting, but it’s simpler than you think. Here’s what you need to know:

Non-Recourse Funding

One of the biggest perks of a legal funding agreement is that it’s non-recourse. As mentioned, this means you only repay the funds if you win or settle your case. If your case doesn’t go as planned, you owe nothing—no debt hanging over your head. The agreement also states that your credit history isn’t a factor—approval is based on the strength of your case.

Attorney Requirement

Your attorney will review and sign the agreement, certifying that the terms are understood and that you’ve been fully informed.

Fees and Costs

Origination and Processing Fees. These are outlined in the legal funding agreement.
Monthly Fees. Typically a percentage of the funding amount (e.g., 2.95%) and may or may or compound monthly.
Annual Percentage Rate (APR). The APR gives a clearer picture of the total cost over a year.
Three-Year Interest Cap. If your case takes longer, the interest won’t continue to accumulate indefinitely after this period.

Additional Funding

If you find that you need more funds during the course of your case, the lawsuit funding agreement may allow for additional funding. However, this isn’t guaranteed. If the funding company agrees to provide more funds, you’ll need to sign an amendment to your original agreement.

Disbursement of Funds

Once the loan agreement is signed by both you and your attorney, the funds are quickly disbursed, often within 24 hours.

Method of Payment

You can choose how to receive these funds, whether by check, wire transfer, or another method that suits you.

Repayment Terms

Your attorney will pay the funding company before you receive your portion of the settlement. If the settlement doesn’t cover the total amount due, the contract may state that you’re only required to pay what’s available after legal fees and costs. This means you might not have to pay the difference if the settlement falls short, depending on the agreement’s terms.

Right to Cancel

Many agreements offer a right to cancel within a certain period, usually five business days, without penalty. This gives you a short window to reconsider after signing.

Partial Access

The lawsuit funding company requires some access to your case details, which means sharing information with a third party.

Confidentiality

Non-recourse funding agreements typically include privacy clauses that protect your personal information, so you can feel secure knowing your case and financial situation remain confidential.

Legal Requirements and Obligations

If you change attorneys or enter into another funding agreement, you need to let the funding company know right away. Not doing so could affect how your case proceeds are managed.

Here’s a handy tip: Before signing, ask your attorney to review the agreement with you so you fully understand the terms.

Types of Lawsuit Funding Agreements You Should Know About

There are different types of legal funding agreements available, depending on your needs. Here’s a quick overview:

Single-Case Funding. This is the most common type, where you receive funding for a specific lawsuit. Some of the types of lawsuits that qualify for funding are personal injury, wrongful imprisonment, wrongful death, work accidents, and medical malpractice.
Portfolio Funding. If you’re an attorney or a law firm managing multiple cases, portfolio funding provides financing for several cases at once.
Law Firm Financing. This is designed for law firms looking for financial help with operational costs, and litigation expenses.
Commercial Litigation Funding. This type of funding is specifically for businesses involved in commercial disputes. It provides the financial resources needed to pursue litigation without draining the company’s capital.
Medical Lien Legal Funding. This funding agreements allows injured plaintiffs to undergo necessary surgeries without upfront costs, with repayment tied to the outcome of their legal case.

How to Apply for Funding

If you think legal funding is the right option for you, getting started is easy. Our applications don’t require a credit check, proof of employment, financial checks, or your credit score. Here’s what you need to do:

Contact Baker Street Funding. You can start the process online by filling out a simple form or giving them a call.
Submit Case Details. Provide the necessary information about your case so it can be evaluated.
Case Evaluation. Our underwriters review the details of your case. We’ll look at factors like the likelihood of winning and the potential settlement amount to determine if you qualify for funding.
Review and Sign. If approved, review the terms carefully with your attorney, and once you’re satisfied, sign the agreement.
Receive Funds: After the agreement is signed, the funds will be sent directly to you, often within 24 hours.

Upon the settlement of your case, your attorney will reimburse Baker Street Funding from the settlement amount. Should you not win, you’ll owe nothing.

Secure the Funds You Need Today

Legal funding agreements can be a real lifesaver during tough times in litigation. They help cover important expenses like medical bills, housing, and daily living costs, letting you focus on what really matters. At Baker Street Funding, we make the process quick and simple, so you can get the money you need when you need it.

Plus, there’s total transparency with our terms, fees, and obligations. Before you sign anything, we make sure that every detail is fully explained to you and your attorney. This means you’ll know exactly what you’re agreeing to, and your attorney will be there to help you through the process.

Don’t let financial stress hold you back—reach out today at (888) 711-3599 and see how lawsuit funding can help you move forward and up. Apply for a lawsuit loan.

FAQ

What happens if I lose my case?

If you do not win your case, you owe nothing back. This is one of the key benefits of non-recourse funding agreements, which means that your repayment obligation is contingent on the outcome of your case.