Does Pre-Settlement Funding Require Employment or Income Verification?

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Pre settlement funding does not require income verification

One downside of being a personal injury victim is your need for financial assistance to make it through while your case slowly winds its way through a clogged court system— because you may have little or no income as a result of the incident.

Whether you are unemployed or not, there is a method of financing called pre-settlement legal funding that may provide the cash you need during your personal injury case without income verification, credit checks, or financial statement proofs. You can use pre-settlement legal funding for nearly any expense resulting from your accident, like paying rent or mortgage, debt, groceries, or other living expenses. 

And the best part? Your settlement loan approval is not based on your income, credit history, or financial statement. You don’t have to be employed or have any source of income to get a cash advance on your pending lawsuit settlement.

Below we highlight the pre-settlement legal funding option, how it is entirely unlike traditional loans, and how it can fit your financial needs while you have little or no income after all.

Pre-settlement legal funding does not require income verification or financial statements

Pre-settlement legal funding is a type of non-recourse advance you get from your future compensation that you don’t have to repay at all until you receive a settlement or jury verdict money after winning your case.

Accident victims who cannot work or have little or no income may find non-recourse funding more suitable than getting a traditional bank loan with regular payments that require collateral and documents to prove financial information. Why? Because, unlike banks, proof of income, employment proof, and credit checks are not requirements that legal funding companies consider when evaluating loan applications.

For that reason, your legal case is one of the most important factors a pre-settlement funding company will consider when evaluating your application since they only have the proceeds of expected compensations to secure repayment.

Proof that your case is strong enough to win comes from the legal documents your attorney must provide for the funding decision-making process to be made. 

Showing proof that your case has merits and chances of success

As noted above, given that a settlement advance company’s ability to get paid back is tied directly to the resolution of your pending lawsuit, your prior history in paying back loans, your current financial condition, and your income is not important to these lenders.

For pre-settlement legal funding companies, the strength of your case is what matters, as they will take a deep look at the value, merits, and chances of eventually getting compensated. Showing a lender the proof that your injury is a result of the other party’s negligence and that the insurance company can fully cover medical procedures and damages over $50,000 can get you qualified fast.

Failure to prove the merits of your claim when the required evidence is unavailable can result in outright denial of your application. Furthermore, your loan application will only be accepted if an attorney represents you and participates throughout the process. 

How does repayment work?

Legal funding companies get paid by your attorney for the compensation you expect to receive after your lawsuit resolves once your attorney receives the proceeds in their trust account.

Whether the monetary recovery comes through a jury verdict in your favor or a settlement check with the other side, it is at that point, and not a moment sooner, that a lender gets paid back for whatever amount of financing they extended to you, along with any applicable interest and fees. 

How is legal funding different than bank loans?

Bank loans

If you have ever applied for a mortgage, a car loan, or any other type of bank loan, you likely are familiar with the process employed by most traditional lenders for evaluating loan applications. On the application itself, you will be required to supply information about yourself, your assets and liabilities, your employment history, your income, your financial history, and reams of financial documents supporting your loan application.

They also require you to consent to the prospective lender pulling your credit score as part of its evaluation process. Traditional lenders often check past repayment history and verify your income, which is often the deciding factor in whether they approve you for financing or not and at what rate. 

The process itself can take months while you are struggling to get by during your personal injury case and waiting to hear from the bank or financial institution. Plus, they can come after you with collection agencies and judgments if you default on the loan.

Settlement loans

A settlement advance is not the type of loan most people are used to getting because it is different than traditional lending in that there is no collateral backing the loan.

Pre-settlement legal funding providers do not look at financial information as a bank would to approve your application and secure their loans. Similarly, they cannot require you to disclose documents such as pay stubs, W2s, and other financial statements because they are not permitted to go after your assets, such as your bank accounts, car, or house if you lose the case and default.

However, while this method of financing may be risk-free for you, it increases a funding company’s investment risk into lawsuits and makes it even more important to verify that your case will win and that your attorney will repay the loan once it does. 

The takeaway

If you are a personal injury victim and you are having trouble making ends meet because you have lost your ability to earn money, consider applying for a lawsuit advance.

Your current financial standing or your past financial track record is not part of the litigation funding criteria. Employment, income proof, physical assets, or credit scores do not increase or decrease lawsuit loan approvals. You do not have to prove that you have any income or even financial stability to get a cash advance based on your potential settlement.

Legal funding is non-recourse, so even if everything goes wrong and your lawsuit does not resolve in your favor, you will not lose your house, your car, or your life savings. The amount of paperwork you will need to complete is minimal, and funds are available quickly once your application has been approved, leaving you free to pursue total value for your case without any worries that you may drain your bank account in the process.

If applying for a lawsuit advance is your next step, Baker Street Funding may be worth considering. We can help you cope with your finances during the pendency of your case, especially when you don’t have the means to pay the advance off anytime soon.

Having low income or no income doesn’t have to be a huge headache with pre-settlement legal funding. All you need to do is fill out your application to get started today. Baker Street Funding’s rates range from 2.95% to 3.4% non-compounding per month, capped in the third year of your loan.

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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