Can I Use a Lawsuit Loan to Pay Spousal Support?

Reading Time: 4 minutes
lawsuit loan to pay alimony

Are you involved in a personal injury lawsuit and struggling with financial responsibilities like spousal support? A lawsuit loan, also known as settlement funding, might be a solution worth considering. Baker Street Funding offers non-recourse loans, meaning you only repay if you win your case. This makes them a safer financial option during tough times.

Legal Constraints and Uses

Lawsuit loans provide a financial cushion for immediate needs—be it for living expenses, medical bills, or even rent. But can these funds be used for spousal support? Generally, lawsuit loans are flexible and can cover expenses that help you maintain your normal life while you wait for your injury settlement.

However, it’s important to consult with your funding company to confirm that using legal funding for spousal support complies with its policies and any legal stipulations.

What Are the Consequences of Not Paying Spousal Support?

Violating a court-ordered spousal support can lead to significant legal and financial consequences, such as: 

  • Legal Action: Your recipient spouse could take legal action against you, which might include the enforcement of the order by a court.  
  • Financial Penalties: Courts may impose fines or late fees on missed payments, which can add to the financial burden.
  • Interest on Missed Payments: Often, unpaid spousal support accrues interest, and thus increases the amount you owe over time.
  • Wage Garnishment: In some cases, wages may be garnished to satisfy spousal maintenance debts, which will affect your income.
  • Impact on Credit Score: Non-payment of alimony obligations can negatively affect your credit score, making it difficult to obtain loans, credit cards, and even housing in the future.

Benefits of Using Pre-Settlement Funding for Alimony Obligations

Opting for pre-settlement funding to manage spousal support payments during your lawsuit offers key advantages. Primarily, It eases the financial burden you might face while your personal injury lawsuit is ongoing, helping you avoid the negative consequences of not fulfilling your alimony obligations. Here’s how this type of funding can help your situation:

  1. Preventing Legal Penalties: Pre-settlement funding helps you stay current on your alimony payments, preventing potential legal penalties such as fines, contempt of court, or additional lawsuits from your ex-spouse.
  2. Protecting Parental Rights: Consistent alimony payments can positively influence custody arrangements or parental rights. It shows the court your commitment to fulfilling financial obligations and supporting your family.
  3. Maintaining Financial Stability: Funding helps you maintain a stable financial situation without depleting your savings or retirement accounts, which is essential for long-term financial health.
  4. Reducing Conflict with Ex-Spouse: Keeping up with alimony payments using legal funding can reduce tensions and conflicts with your ex-spouse. This can lead to a more amicable post-divorce relationship, which is beneficial for co-parenting.
  5. Providing Financial Flexibility: By securing funding during a legal battle, you can allocate other available funds to different urgent needs or investments, rather than using all your liquid assets to cover spousal support.
  6. Supporting a Stronger Legal Case: Demonstrating the ability to meet your financial responsibilities can positively impact the perception of your case in court, potentially influencing settlement negotiations or judicial decisions in your favor.
  7. Preventing Asset Liquidation: Pre-settlement legal funding allows you to meet alimony bills without having to sell valuable assets like your home or car. This helps preserve your long-term financial security

Understanding Your Funding Application with Spousal Support Liens

When you apply for pre-settlement funding and you have outstanding debts for spousal support, the process to evaluate your application gets a bit more detailed. At Baker Street Funding, we carefully assess your case to make sure the loan makes sense for both you and us. Here’s how we handle it:

  • Review Your Legal Documents. First, we look over all the legal papers related to your injury lawsuit. This includes any court orders that say you must pay alimony and any other records of liens. 
  • Assess the Impact of Your Debts. We calculate how much your spousal support debt affects the money you might get from your lawsuit. Essentially, we need to determine if after paying off the lien, there’ll be sufficient settlement funds left to cover the repayment of your loan.
  • Talk with Your Attorney. We talk directly with your lawyer to understand better your chances of winning your case and how long it might take. Your attorney’s input helps us assess the risk involved in providing you with funding.
  • Adjust the Loan Amount: Depending on how much you owe in alimony and the projected settlement, we adjust the funding amount we offer. 

Additional Funding Opportunities After Covering Your Spousal Support Lien

When you’ve paid your spousal support lien in full and need more funding, here’s how we evaluate your new application:

  1. Verify Payment of the Lien. You need to provide documentation, such as a court order or official record, confirming that the spousal support lien has been fully paid. Your attorney may also confirm that all spousal support payments are current.
  2. Re-evaluate Your Case. Once we’ve verified that the spousal support lien is paid, we re-evaluate your case. We look at any new developments since your initial funding and settlement projections, which can increase the amount of funding you qualify for.

The Takeaway

Managing financial responsibilities such as alimony bills during a personal injury lawsuit isn’t easy, especially when financial reserves start to dwindle. With Baker Street Funding, you can use our settlement loans to keep those spousal support bills in check.

Our legal funding options are not traditional loans. You only need to repay us if you win your case, and repayment comes from your settlement check. This means there’s no added financial strain if your litigation is unsuccessful.

Applying for a lawsuit loan with Baker Street Funding involves no credit checks or income verification. Contact us today at (888) 711-3599 to explore how our team can help you get the financing you need to manage your spousal support payments.

Paying off an alimony lien through legal funding can prevent additional legal issues, protect your credit score, and give you peace of mind so you can focus on healing and moving forward.

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.

See some of our settlement funding products

Learn more about pre-settlement funding

Select a legal funding service to get started. 

Attorney Requests

Lawsuit Loans

Litigation Funding

Personal Injury Loans

Settled Case Loans

Surgery Funding

Or just call us at 888.711.3599 to apply.