Anyone who has been around or involved in the American civil justice system knows cases can take a long time to resolve.
The backlogs in many states’ court systems have only grown even longer, particularly with the delays caused by the Covid-19 pandemic shutting down many court systems for months.
These delays can leave personal injury and other plaintiffs in desperate financial circumstances because it may take years for a case to resolve.
If you have been injured, the chances are that you are struggling financially. Your medical and other bills may be piling up, you may be unable to work because of your injuries, and you may feel desperate while no income is coming in the door.
Your personal injury attorney tells you to be patient and that your case will eventually resolve and put some money in your pockets. However, they are not the ones whose phone rings with debt collectors hounding them for unpaid bills or who cannot put food on the table for their family or keep a roof over their heads.
Fortunately, pre-settlement funding can be an attractive option if you are cash-strapped during the pendency of your legal case. Read on for more about getting money before your settlement through pre-settlement funding.
What Is Pre-Settlement Funding?
Although it is known by various names, with some calling it a lawsuit advance, others a settlement loan, and others lawsuit funding, these terms all refer to the same thing.
Whatever term you prefer, a settlement loan or pre-settlement funding provides you with a cash advance on your pending lawsuit before your case settles. It helps you receive part of your settlement money early on, that is, before your settlement check arrives.
In other words, you can obtain a portion of your settlement money before your case has concluded.
A settlement advance allows you to pay your medical bills, mortgage or rent, groceries, and other necessary expenses while your lawsuit is pending.
The money is then paid back after your case resolves, and you receive monetary compensation.
How Does It Work?
To get money before your settlement, you first have to apply for pre-settlement funding and give permission to your attorney to speak to the lender.
After your attorney sends in your file, a funding decision is made 24 hours later. Once approved, a contract is formulated for you and your attorney to sign. The money is sent to you once the company receives the signed agreement.
The money is then paid back after your case resolves, and you receive monetary compensation.
What Are the Benefits of Settlement Funding?
Settlement funding has several benefits:
- You can wait for the right settlement offer versus having to take a lowball insurance offer early.
- There are no monthly payments, no credit score, or employment verification.
- Funding is available in many different amounts, ranging from the thousands to the hundreds of thousands, depending on your case.
- Low-interest pre-settlement loans from some lenders, with more attractive financing terms than personal loans, credit cards, payday loans, or other forms of loans or financing.
- You can use them for everyday expenses, such as rent/mortgage, groceries, or medical bills.
- Settlement funding companies cannot pursue you if you either lose your lawsuit, or it does not settle for whatever reason.
- Decisions on applications are made quickly, putting money in your hands faster than if you apply for other types of loans or financing.
Is Pre-Settlement Funding Right for You?
Pre-settlement funding can be right for some plaintiffs but may not be right for all.
Your case may not be right for a settlement loan if your ultimate recovery is not expected to meet the threshold that would allow you to comfortably pay back a cash advance on your settlement.
That’s why pre-settlement funding companies release up to 10% of the potential value of your case. This policy is intended to protect you so that you do not borrow more than you can eventually hope to recover from your lawsuit.
Experienced personal injury attorneys carefully vet cases to ensure that your lawsuit is right for a settlement loan.
You also should consider your own financial circumstances. If you are injured, have no sources of income, and are struggling to make ends meet, then a settlement cash advance on your pending lawsuit can be the solution to enable you to stay current on your urgent bills while you wait for your lawsuit to resolve.
The takeaway
If you are a victim with a pending personal injury or another type of case, a settlement loan serves as a way to receive a cash advance against the expected settlement of your case.
Pre-settlement funding is fairly easy to get if you meet the underwriting criteria. It can serve as a bridge to get you through the difficult period while you wait for your case to make it through the often-long period between filing your lawsuit and an eventual settlement or resolution of your lawsuit.
Apply for a lawsuit loan with simple interest rates and qualify in just a few minutes—with literally no strings attached.
