Do I Have To Repay The Pre-Settlement Funding Money If I Win My Case?

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Do I Have To Repay The Pre-Settlement Funding Money If I Win A Case?

Yes. After you win the case and receive your compensation, the pre-settlement funding money must be repaid. But if your lawsuit is lost, you won’t owe anything.

Dealing with a personal injury or a civil rights case can be emotionally and financially draining. While awaiting a resolution, you might find yourself struggling for cash as you face ongoing expenses and medical bills. Pre-settlement funding offers a safe and accessible risk-free solution tailored for each case to help cover these costs during litigation.

Legally referred to as non-recourse loans, these advancements are designed to provide immediate financial support while your case is presumably pending or in progress.

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So, what is non-recourse pre-settlement funding?

Non-recourse pre-settlement funding is a financing process where, typically, you obtain cash from the future monetary recovery of your case until you reach a legal settlement. Your repayment responsibility with non-recourse funding relies on the outcome of your case, meaning if it’s won, and the payment will include interest rates and the principal. This method of financing eliminates all financial risks for you since no repayment is required whatsoever if you end up losing the case.

In addition, pre-settlement funding is structured differently than traditional loans, which is why non-recourse funding often comes with higher fees or interest rates than traditional bank loans—there is more risk involved for funding providers.

The advantage of this type of funding is that there are no income or credit checks, you are not to make any monthly payments, and most cases can be funded within 24-48 hours.

Your attorney pays back the pre-settlement funding company after you win your case.

Every funding provider will require the attorney handling the case to consent to the loan and sign the funding agreement before releasing the advance This funding agreement is secured by a lien that the lender places on your expected lawsuit proceeds, just like a medical lien.

Since lawyers understand this part of the process is critical in helping their clients get the money they need, they sign a lawsuit funding contract agreeing to pay back any borrowed funds in the event of a successful settlement. Once your settlement check is sent by the defendant, it will go into your attorney’s trust account. Only then will your attorney pay back all of your liens, including the pre-settlement loan.

Nonetheless, if you take out pre-settlement legal funding but don’t want to be responsible for paying back the amount when you get your settlement payment, then this type of funding is not for you because legal consequences may subsequently follow.

What happens if I win my case and I fail to pay back my pre-settlement advance?

As noted above, if you take legal action and pursue a settlement, you must be mindful of your repayment obligations when you opt for pre-settlement funding. Under most legal systems, the repayment of non-recourse funding is considered a non-dischargeable debt if the plaintiff wins the case, so the funds must be repaid—failure to do so can potentially lead to serious legal repercussions such as wage garnishment, repossession of property, potential disbarment of your attorney, and getting sued by the company. 

For this reason, learning your responsibilities before taking out pre-settlement legal funding and understanding the consequences should the loan defaults repayment if you win the case can avoid any potential financial pitfalls down the line. On top of that, with some lenders, the interest may also accrue if payment is not made on time after winning a case. They might even go as far as denying both the attorney and plaintiff all future settlement funding applications.

The good news is you don’t repay the funds if you lose your case.

Even if you have the best case, everyone has to consider the possibility of losing. In that eventuality, you don’t have to worry about repaying the pre-settlement loan, as you owe nothing if your lawyer is unsuccessful in settling your case. This ensures that you can move forward with your suit without the stresses of burdensome losses should the case fails. Think of it as the contingency fee agreement you have with your attorney; you don’t have anything to pay them back with if you fail to prevail in court and no financial compensation is recovered.

The pre-settlement funding application process is easy.

When seeking financial relief while pursuing a long and drawn-out lawsuit, pre-settlement legal funding is a terrific option. You could very well be eligible for the advance if you have a strong case and an attorney representing you. Applying is easy; all you need to provide are your name, contact information, state of residence, and your attorney’s contact information.

Once you submit the application, the lender will assess your case and determine the appropriate amount to disburse as an advance. The amount you receive greatly depends on various factors of your case, including the severity of your injuries, pain and suffering endured, lost wages and incurred medical bills. Funding providers work closely with attorneys to provide an amount that is suitable for the case at hand.

One of the main benefits of applying for this type of funding is the expedited approval process. Once your application has been reviewed and approved, you can generally expect to receive the funds within 24-48 hours.

The takeaway.

Lawsuits can take a toll on all aspects of your well-being, leaving you feeling overwhelmed and anxious. The added burden of financial stress can be too much to handle. But, with pre-settlement legal funding, you receive quick access to cash during life’s most challenging moments, and it gives you help that was not available before. You can use the money to cover urgent payments for rent and medical bills or manage any other costs while pursuing a fair settlement offer. It can provide a strong financial advantage when your lawyer is litigating a case, and it could make the difference between having to settle for less than what you deserve or not settling at all.

However, defaulting on repayment can result in serious issues if you end up winning compensation, including potential lawsuits for non-payment. The best way to avoid this is by taking into account all the terms associated with your loan agreement and understanding how much your attorney will be paying back when you win.

If you are interested in pre-settlement legal funding, you can get a seamless application process with Baker Street Funding. Explore our benefits, which include low simple interest and capped rates. Our customer service is impeccable and well-trained to provide the best funding services overall.

Want a better lawsuit financing company? Fund smarter with Baker Street Legal Funding and save cash on your settlement. Apply for a non-recourse lawsuit loan in minutes.


What are the conditions for repayment?

The conditions for pre-settlement funding repayment depend on the outcome of your case. Once the settlement proceeds of your case are received, then the payment term will be on the funding agreement that you signed.

Do I have to repay the funds if I lose the case?

If you do not win your case, pre-settlement legal funding is forgiven debt, and no repayment is required.

How long does my attorney have to pay the legal funds back?

Since your attorney is the one responsible for repaying the advance, the term length from when your monetary recovery is received is set forth according to the funding agreement between you and the lawsuit loan company. Typically, funding companies expect repayment within 3 business days from when the settlement proceeds hit the attorney’s trust account, while other lenders may offer a 14-business-day limit.

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.

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