If you’re recovering from an injury and facing financial pressure, pre-settlement funding can come in handy. Because traditional loans from banks have a lengthy process and strict qualification criteria, pre-settlement funding is gaining tremendous momentum and recognition as a reliable and alternative source of quick financial assistance for accident victims.

Here, we’ll explore what percent of your future settlement you could access through pre-settlement legal funding. Plus, we’ll shed light on the key factors that determine these amounts.

The percentage of your settlement you can expect to receive with pre-settlement funding

When you receive a portion of your settlement, you can cover a broad range of day-to-day expenses and bills. However, the percentage you can borrow is typically low. Most pre-settlement funding companies will advance lawsuit loans up to 10% of your estimated settlement for ongoing cases and fund up to 20%, if your case has already settled but awaits payment.

This cap on legal funding percentages serves a dual purpose:

It leaves room for you to receive a decent amount of money when your lawsuit finally settles (or wins).
It gives funding companies more security to receive payment for the money lent to you, even after other charges and legal costs have been covered.

Moreover, the rationale behind setting a specific percentage for advances is deeply rooted in the anticipated legal fees and liens that come out of the final settlement. Since your attorney is in charge of properly managing these payments, lenders will strictly require you to have one representing you. They work with your legal team to evaluate your case’s worth accurately before extending an advance.

As you and the defendant are yet to agree on the precise amount of compensation, remember that the value of your case is only an estimate and the eventual settlement amount remains unknown. The contingent nature of pre-settlement funding means if the outcome of our case isn’t in your favor, the funding company absorbs the financial risk, not you.

The amount that will be paid out in other liens and fees first

Some of the fees that may come out of your settlement or lawsuit award can take up from 30% to 100% of your settlement, and they may include:

Lawyer’s fees.
Court fees accrued throughout your case.
Medically liens.
Medicaid, Medicare.
Tax, child support, or bankruptcy liens.

The common range for legal funding amounts

The amount of funding you’re eligible for directly relates to your case’s value — simply put, the more your case is potentially worth, the more funding you might access. Different legal funding companies have their own policies and limits, but here’s a general idea to guide you:

Typically, you can expect to borrow between $1,000 and $100,000. So, if your lawsuit is estimated to be worth around $50,000, you could be eligible for up to $5,000 in pre-settlement funding.
While it’s less common, there are instances where substantial funding up to $1 million is provided, especially for high-value personal injury claims that could exceed $10 million. On the whole, the cap for many legal funding agreements tends to surround $500,000.

How to qualify for pre-settlement legal funding

The qualifications for pre-settlement legal funding is simple, though specific requirements can vary by company. Here’s a broad outline of what you might need to qualify:

Having an Attorney. An attorney must be handling your case on contingency. This means your attorney gets paid only if you win your case.
Age Requirement: You need to meet the legal age requirement for entering into contracts in your state.
Active Lawsuit: Your lawsuit must be officially filed and active in the courts.
Case Strength: There should be a strong likelihood of your case resulting in a win.
Insurance Details: The insurance limits and carrier of the opposing party need to be clear, as this often affects the settlement amount.
Minimum Case Value: Typically, your case should be valued at over $50,000 to qualify for funding.

While these points cover the basics, keep in mind that pre-settlement funding companies might have additional criteria to assess your lawsuit’s credibility for funding. Understanding these qualifications gives you a better idea of what they’ll be looking out for, so that you’re well-prepared to handle your financial needs as you consider different funding options for your lawsuit.

The takeaway

Understanding what percent of your settlement you can receive in pre-settlement funding boils down to a few critical factors: the projected strength and your case’s worth, along with your attorney’s expertise, and state regulations. On average, you can expect to receive 10% to 20% of your case’s estimated value.

While it’s natural to seek the maximum control and benefit from your settlement, it’s wise to approach pre-settlement funding with a strategy that protects your future financial well-being. Taking more than 10% upfront might seem tempting, especially when facing financial strain, but remember, the final outcome of your case and the total settlement amount remain uncertain until resolved. You don’t want a large percentage of your settlement going toward repaying the advance.

For those finding it difficult to juggle financial obligations while your lawsuit is pending, Baker Street Legal Funding offers a lifeline. With simple, low interest rates that are capped after three years, we provide you with the financial relief you need quick —within 24 hours once your attorney shares your case details.

You no longer need to fret over immediate financial responsibilities like medical expenses, groceries, or housing costs. Apply at Baker Street Legal Funding for pre-settlement funding eligibility, and access amounts ranging from $1,500 to over $2,000,000 upon approval. And if your case doesn’t succeed, rest easy knowing there’s no obligation to repay the advance or its costs.