Pre-Settlement Funding Without My Attorney Consent Or Signature: A Complete Guide

Reading Time: 9 minutes
Lawsuit loan without attorney's consent

You cannot get a pre-settlement loan without an attorney or without your lawyer’s consent and lien acknowledgment (signature) of the lawsuit funding contract.

In the United States, car accidents occur at an alarming rate, with over 6 million taking place each year. This translates to more than 16,000 individuals sustaining injuries daily. These unfortunate events can result in severe physical harm, emotional distress, and financial hardship.

In most cases, obtaining a fair settlement can be a protracted legal process, leaving injured victims struggling to meet medical expenses and everyday living costs. These costs can pile up quite quickly, creating a financial burden that can be hard to handle.

Pre-settlement funding, commonly known as a lawsuit loan, provides a vital financial resource that allows you to cover your daily living expenses while you wait for your settlement. Taking out a loan from your expected settlement can also be beneficial as it can give your attorney more time to pursue justice on your behalf.

While exploring the possibility of lawsuit loans, plaintiffs often wonder whether they can obtain a pre-settlement loan without their attorney’s approval or without legal representation. Regrettably, the reply to this question is a definitive no. Securing a pre-settlement lawsuit loan without a lawyer or agreement to the loan is a no-go. Every company that offers lawsuit funding mandates that you hire an attorney on a contingency basis and that he or she is fully cooperative with the lender. This stipulation is due to the perceived high risk associated with lending to plaintiffs.

Here are some key takeaways:

  • To obtain a lawsuit loan, your lawyer must consent to the loan, follow your instructions, provide case documents, and acknowledge the funding contract by signing the lien.
  • Since plaintiff borrowers are considered high risk to lenders, every legal funding company will typically expect you to have hired the services of an attorney through a contingency agreement.
  • The pre-settlement loan process can be more complicated and delayed without the involvement and signature of a lawyer.
  • Lawsuit loans are non-recourse and not actual loans because they are secured solely by a future lawsuit settlement. If you lose your case, you don’t owe the lender anything. It would not make sense for a lender to ask for extra collateral like a house or car.
  • Lawsuit funding for law firms is the only financial service that may require collateral.

Understanding the Role of Your Attorney in Pre-Settlement Funding

Obtaining a pre-settlement loan requires the involvement of your attorney. Here is why. Lawsuit loans are a unique form of non-recourse financing, meaning you’re not personally liable to pay back the advance if you don’t get a settlement for your case. The funding company takes on the risk, and your credit, assets, or income doesn’t factor into your lawsuit funding eligibility. Instead, the strength, complexity, and potential value of your case are what matter.

To assess these eligibility criteria for the advance, the funding company needs to communicate with your attorney to get the required detailed information about your claim.

Due to these factors, your attorney’s consent to partake in the funding process is crucial. Pre-settlement loans rest on the assumption that the plaintiff will eventually win the case and obtain a settlement.

Without collaboration between your attorney and the lender, it is impossible to secure pre-settlement funding since there is no way to predict the outcome of your case or its potential merit. Your attorney’s role is to represent you and ensure that the funding company has a clear understanding of the worth of your estimated prospected settlement.

Plaintiffs cannot receive lawsuit loans without their attorney’s signature or consent. You can only obtain pre-settlement funding with a cooperative lawyer.

Legal Regulations and Your Attorney’s Responsibility

Your attorney plays a pivotal role in the process of obtaining a lawsuit loan. Although legal regulations in most states prohibit attorneys from directly providing financial aid or loans to their clients, your lawyer’s participation in the lawsuit loan procedure is indispensable. It is ultimately your attorney that helps the lender determine the viability of the lawsuit before making a funding decision. Based on the lender’s standpoint, it is highly unlikely that you’ll receive financial compensation if your lawyer declines to cooperate.

Moreover, prior to the release of legal funds, your attorney must not only agree to the lawsuit loan but also acknowledge and sign the legal funding agreement or issue a Letter of Protection (LOP). This is the lender’s method of guaranteeing repayment. Securing a lawsuit loan essentially places a lien on the potential settlement of a case via a Letter of Protection or your attorney’s signature on the lien.

If your case settles successfully, the settlement funds are then deposited into your attorney’s escrow account. At this point, your attorney is responsible for repaying the lawsuit loan from the settlement amount after all other liens are paid. Then, the remaining balance is distributed to you.

This lien ensures that the legal funding company recovers its investment, making the attorney’s signature a vital component in the lawsuit loan process. This is the lender’s method of guaranteeing repayment. This step is also crucial as it ensures that the transaction is conducted legally and ethically, protecting your interests and ensuring fair treatment.

What If You Don’t Have an Attorney’s Approval or Representation?

The first step for those who need a lawsuit cash advance but don’t have an attorney is to obtain legal representation. Pre-settlement funding companies require you to have an attorney due to the inherent risks involved with investing in anticipated settlements.

If your attorney doesn’t want to cooperate, consider discussing your financial responsibilities with him or her and understand why there are concerns. Occasionally, attorneys may have legitimate reasons for their hesitation, and it’s in your best interest to respect their professional judgment.

The fact remains that without your attorney’s active participation and signature validating the funding agreement, the process of obtaining a pre-settlement loan can become considerably more complex and potentially less favorable for you. Your attorney’s signature is not just a formality but a necessary step in qualifying and not getting denied on the loan. It also ensures that the repayment process is clearly defined and agreed upon.

In the end, you cannot get a pre-settlement loan without an attorney representing you. Lawsuit funding is contingent upon having a lawyer’s consent and signature.

Understanding Your Lawyer’s Objection

Even when you have a great relationship with your lawyer, there may be instances where he or she may oppose a pre-settlement loan on your pending lawsuit. If you find yourself in a situation where you urgently need a lawsuit loan, but your attorney is not consenting at all, these could be the reasons:

  • You reside in a state where lawsuit loans are not permitted.
  • You have already taken out the maximum number of advances permitted by a legal funding company.
  • Your personal injury lawsuit is too early in the proceedings to qualify for funding.
  • In rare cases (less than 0.1%), the attorney may have a policy against working with pre-settlement lending companies.
  • Your attorney may also refuse if the loan is not for an urgent need, such as housing, transportation, electricity bills, or food.

At Baker Street Funding, we work with attorneys to address their concerns and provide them with the LOP of their choice. We also offer the option for minor modifications to the pre-settlement funding agreement. If your attorney is uncomfortable with another lender’s contract, we encourage you and your lawyer to contact us so we can work together to approve your case with a contract everyone can agree to.

Your Attorneys’ Obligation to Support Pre-Settlement Funding Decisions

The ethics guidelines may be violated if your attorney refuses to provide information or acknowledge the funding contract a lender company has for you. Despite the fact that attorneys can advise and suggest to their clients, they cannot force them to do something against their will. As your advocate, your attorney is bound to act in your best interests.

 According to rule 1.2 of the ABA states: “(a) Subject to paragraphs (c) and (d), a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client’s decision whether to settle a matter.”

As a result, the attorney should respect and support a client’s decision to seek a lawsuit loan. This rule is also applicable in the context of a settlement advance, as the attorney should provide the client with all necessary information to make an informed decision about obtaining lawsuit funding.

So if you decide to pursue a pre-settlement loan to cover your living expenses, your attorney must follow your instructions, share necessary case documents with the lender, and sign the lawsuit loan contract. Remember, the decision to obtain funding is ultimately yours, and your attorney should be supportive of and guide you through this process.

Calculating the Amount of Your Lawsuit Loan

The amount you can receive from a lawsuit loan depends on the projected value of your legal claim. For instance, if your accident case is worth $250,000, you could potentially receive up to $25,000.

However, be wary of hidden fees and lawsuit funding companies that insist on checking your credit. These are not standard practices in the pre-settlement funding industry. The focus should be on the merits of your case, not your personal financial circumstances.

Remember that legal funding companies determine your future settlement amount by several factors, such as the severity of your injuries, the impact on your life, and the negligence of the other party.

Clearing Up Misconceptions About Pre-Settlement Funding for Plaintiffs and Collateral

There are some common misconceptions about pre-settlement funding, especially in relation to collateral. Some sources may suggest that if you don’t involve your attorney in the process, lenders might ask for additional collateral, such as a lien on your house or car. Nonetheless, this is not accurate and goes against the fundamental principles of lawsuit funding.

Legal funding, by its very nature, is a non-recourse loan. This means that the loan repayment is guaranteed solely by the eventual settlement of your lawsuit. If you lose your case, you owe nothing to the lender. This is a key characteristic of pre-settlement funding and what differentiates it from traditional loans.

In the world of finance and investment, it would not make sense for a funding company to ask for additional collateral like a house or a car in a legal funding scenario. Here’s why:

Risk Management

The primary risk for the lender in pre-settlement funding is the outcome of the lawsuit. If the lawsuit is unsuccessful, the lender loses its investment. Adding additional collateral like a house or a car doesn’t mitigate this risk. It only complicates the process and adds additional costs and risks for the lender.

Cost Efficiency

Going after a client’s personal assets like a house or a car in the event of a lost case would involve significant legal costs and logistical challenges. It’s not cost-effective for the lender, especially considering that most clients seeking lawsuit loans are facing financial hardships.

Regulatory Compliance

If a legal funding company were to require additional collateral, it would change the nature of the loan from non-recourse to recourse. This would subject the loan to different regulations and potentially lower interest rates, which would not be in the lender’s best interest. This is due to the fact that most people requesting pre-settlement loans are financially strained.

Ethical Considerations

Asking for additional collateral from clients who are already facing financial difficulties due to a personal injury case raises ethical concerns. The purpose of pre-settlement funding is to provide financial assistance to accident victims, not to plunge them into further financial trouble.

A reputable lawsuit funding company will only consider the legal merits and the possible settlement amount of your case when reviewing your application. Including your attorney in the process is extremely important because your lawyer can provide the necessary information to the lender for a funding decision. Any suggestion of requiring additional collateral for a pre-settlement loan is not consistent with standard industry practices.

Only Lawsuit Funding for Law Firms may be Subject to Collateral Requirements

While we’ve primarily focused on lawsuit loans for plaintiffs up to this point, you should be aware that the pre-settlement funding process is different for law firms seeking litigation financing. In these cases, lawyers might seek funding to cover case costs, and this type of funding typically requires collateral and credit checks. This is because the funds are released to the law firm itself, and it is based on its future legal fees from the settlement agreement. Funding companies need to make sure they are dealing with responsible parties.

The rates we offer in these scenarios are typically lower, around 2% simple per month, and the amounts we provide can reach into the millions of dollars. This is a service that many banks do not provide, making it a unique aspect of the legal funding industry.

Please bear in mind that litigation funding for attorneys is not pre-settlement funding for personal injury cases, where lenders consider the merits and the ultimate payout of the lawsuit, and collateral is not required.

The Importance of Getting Your Attorney’s Consent

While you can’t get pre-settlement funding without your attorney’s consent and signature on the contract, just remember that the ultimate decision on whether or not to accept a legal funding offer rests with you. If a lender presents you with an agreement that you believe is not beneficial to you, you are not required to accept it. However, if you want to enter into a lawsuit loan agreement with a funding provider of your choice, your lawyer should not refuse to help you, especially when your standard of living is at risk.

In addition to providing immediate financial relief while your case is pending, your attorney’s consent demonstrates that the lawsuit funding process is lawful and fair, ensuring your protection. Your attorney’s involvement also makes certain that the funding company has a lucid understanding of how much they can realistically invest in your case.

Cooperative attorneys can ultimately help their clients get a better rate and terms on their pre-settlement loans.

Our Commitment to Your Financial Needs

At Baker Street Funding, we prioritize your financial needs and work closely with your legal counsel as we strive to provide you with the best lawsuit funding options, often on the same day of approval. Our application process is straightforward, and we offer non-recourse lawsuit loans with the lowest interest rates possible. Our team of underwriters, all former personal injury attorneys, will review your claim promptly, ensure your case details remain confidential, and have a decision for you in less than 24 hours.

As the value of your case increases and your personal injury claim advances, you may have the opportunity to obtain a second pre-settlement loan or even multiple loans to cover living expenses, medical bills, and other costs. We recognize the financial impact that a personal injury case can have on innocent victims and are available to assist in relieving that burden. Our goal is to provide the necessary financial support for you to devote your attention to your recovery and case.

We understand that every case is unique, and we’re committed to providing personalized lawsuit financing solutions, either through a rolling contract or a lump sum. Our goal is to make the process as smooth and stress-free as possible because you deserve it.

For more information about pre-settlement funding costs, use our lawsuit loan calculator or contact us directly at (888) 711-3599. Baker Street Funding is here to help you get the best possible outcome in your case and accelerate your financial recovery.

With Baker Street Funding, you can easily apply for a lawsuit loan and get a case evaluation qualification within minutes. Upon approval, we will structure your loan with the lowest rates, non-compounding capped in the third year.

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.