Personal injury lawsuits can be unpredictable, and unforeseen accidents, like slips and falls, medical malpractice, brain injuries, or automobile crashes, can quickly put you into a hole if the extra money needed to survive is not available at your disposal.
It is a known fact that insurance companies let legal cases sit for a long time on top of making lowball offers to settle claims that do not even come close to the case’s actual value. Furthermore, plaintiff attorneys typically advise their clients to be patient since they put enough pressure on the defendant to get full compensation. While it might be tempting to settle your case for less, it can help if you can make it through your legal matter’s extended period until it resolves to get a valuable settlement or award.
The real conundrum is how to cover your expenses and keep a roof over your head and food on the table when you find yourself cash-strapped during a personal injury lawsuit. The great news is you can handle your financial struggles while your case is pending with legal funding (a synonym for lawsuit loans.)
Although each case is unique, one commonly asked question is: “When do I have to repay a lawsuit loan?” In short, the pre-settlement legal funding repayment is due 3 – 14 days after you sign the disbursement once the settlement check or award hits your attorney’s account. That means you are not required to send any payment if, for whatever reason, your case does not resolve in your favor.
Here’s the scoop on how pre-settlement legal funding works, when you have to pay it back and when you don’t.
First Things First: Your Repayment Structure
Legal funding is structured to the components that make up a loan, like the interest, collateral (your potential settlement or award), and repayment. It comes with an interest rate and is due promptly after your attorney receives your compensation money in their trust account.
Since pre-settlement legal funding is based on your prospected settlement or jury verdict, lenders require attorneys to directly repay them immediately after the plaintiff signs the distribution and the monies into their account.
Depending on the lender, the term length in which a lawsuit loan must be repaid is 3-14 business days from when your lawyer receives your compensation after settling other liens and their legal fees. Generally speaking, attorneys settle most payments within a few days.
It’s important to consider that paying back the loan once your attorney receives your winning settlement proceeds (or jury award) only makes sense when you understand the nature of these financial transactions. If a lender agrees to be repaid entirely out of your settlement or lawsuit money, but you don’t get any money from it, then there is nothing for the lender to be repaid from, and they will ultimately take the loss.
To obtain funding for your legal claim, you simply need to apply with Baker Street Funding, have your attorney communicate and provide the required case file to underwriting, and sign a contract upon approval — all with a 24-hour turnaround time.
All decisions are made quickly, and you will receive the money fast if your legal funding application is approved.
Pre-Settlement Funds Vs. Bank Loans
Here are some of the basic differences between legal funding and traditional financing:
Funding decisions are quick
A mortgage can take forever between the appraisals, inspections, the foot-thick stack of documents you must fill out, etc. Many other types of conventional loans are similar: the lender requires all sorts of voluminous documentation to be filled out, and then it takes weeks or even months to decide on your application. Additionally, traditional lenders look at factors such as a low debt-to-income ratio when deciding on their loans.
With pre-settlement legal funding, the only information required is your case’s file; thus, your lawsuit can be funded in less than 24 hours. Moreover, receiving funding for your case won’t affect your credit because lenders don’t bother to check your credit history or income.
Only pay it back if you win
Most people are used to loans that are paid back in regular installments. On the other hand, pre-settlement legal funding is non-recourse; thus, it differs entirely from traditional bank loans.
When you obtain it, your settlement lender agrees to extend financing to you now in return for a legal right to be satisfied that amount, plus any accrued interest and fees, at the successful conclusion of your case once the legal proceeds are paid.
Paying Your Funds Before Your Legal Case Concludes
You can pay your loan at any time, and unlike conventional loans, there are no prepayment penalties. There are absolutely clear benefits to repaying your loan before your legal case concludes, as it can save on your funding’s total cost in interest rates if your case wins since interest rates will stop accruing.
On the surface, this sounds great but be forewarned. Before embarking on making a payment to a legal funding company to save some money when, in fact, you didn’t have to, and you lose your claim, it is important to understand that you will not get that money back.
There is no obligation to repay an advance based on the proceeds from your pending settlement while you are stretched financially and just trying to make it while your lawsuit is slowly working its way through the courts.
Consider this seriously; you run off the chance that your legal matter resolves in favor of the defense. If that happens, you have the option to default on the loan and move on.
Refinancing Your Loan With a Different Settlement Lender
Don’t underestimate the potential power of refinancing your legal funding agreement from a different lender to a new lender. You could end up owing a lot less once your case successfully concludes because your interest rate will be reduced.
Refinancing allows you to combine all previous loans from your current lender into one new loan with a lower rate if the lender is legitimate.
Find out more about pre-settlement legal funding buyouts from Baker Street Funding; we can potentially improve your rates and ultimately lower your final payment.
Dealing with financial troubles is never fun, and more often than not, injured victims spend several days to months out of work. Whether you were involved in a car accident or have a wrongful imprisonment lawsuit, you have this non-recourse funding option to help you get the money you need right away from your upcoming settlement or jury award without worrying about making payments until the successful conclusion of your case.
So, you see, there is only one option for making a lawsuit cash advance easier to repay. How long do you have to pay back pre-settlement legal funding? Your attorney can pay back the lawsuit loan soon after he or she receives the insurance settlement or the proceeds for a jury verdict.
You also have the option to get a new funding advance with a different lawsuit lender that provides better rates. The benefits of going this route include a lower interest rate and, therefore, a lower payment at the end.
The process takes 24 hours, and you can take care of your living expenses and medical bills fast. With Baker Street Funding, you’ll get 2.95% to 3.4% monthly fixed interest rates after winning your case and pay less overall for the loan because of the relatively short 3-year capped rate. Caps remain steady throughout the 3-year life of the loan or when your case successfully concludes (if it resolves before.)
Ready to explore Baker Street Funding’s low-interest lawsuit advances? Apply in just one minute.