Personal injury victims often need more cash than they have for most essential expenses, and that’s when pre-settlement funding can come in handy.
Because traditional loans (from banks and other financial institutions) can take a long time to get, pre-settlement funding is gaining tremendous momentum and recognition as a reliable and alternative source of quick financial assistance for accident victims.
Here, we will give you a better idea of what percent of your settlement you can get with pre-settlement legal funding and educate you on the factors that go into it.
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 the expected settlement (before a case resolves) and fund up to 20% to people awaiting payment from settled claims.
Legal funding has a general percentage cap rule because it leaves room for you to receive a decent amount of money when your case finally settles (or wins). Additionally, it gives the funding company more security that they will receive payment for the money lent to you, even after other charges and legal costs have been covered.
A big factor on why lenders set a fixed percent on the money they can advance you is because they highly consider how much in fees and liens will be paid out of the final settlement. Since your attorney is in charge of properly managing these payments, they will strictly require you to have an attorney so they can assess your legal claim together to decide its value before providing you the advance.
While the value of your case is only an estimate as it is still in progress, you and the defendant are yet to agree on the precise amount of compensation. Since the payment is contingent on you winning your case, the pre-settlement funding provider will take on the loss if your case isn’t successful in the end.
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 award can take up from 30% to 100% of your settlement, and they may include:
- Court fees accrued throughout your case.
- Medically liens.
- Medicaid, Medicare.
- Previous funding agreements plus the agreed-upon interest.
- Lawyer’s fees.
- Tax liens.
- Child support liens.
The common range for legal funding amounts
While different legal funding companies operate different policies and terms of the agreement, the amount of the loan you can get will be determined by how much your case is worth. In the simplest terms, the higher the value of your case, the higher the amount you can take.
In general, most legal funding companies allow borrowers to take out anywhere between $1,000 – $100,000. However, the amount of money you get approved for will depend on the value of your lawsuit.
For example, your case is valued at $50,000. That means you can get no more than $5,000 in pre-settlement funding.
Also, although rare, the highest amount approved for pre-settlement funding for personal injury claims is generally $1 million, and that’s for cases worth over 10 million dollars. On average, the highest funding amounts tend to surround $500,000.
How to qualify for pre-settlement legal funding
Each company has its own requirements. Most want these qualifications:
- An attorney must be handling your case on contingency.
- You must be up to legal age.
- You must have already filed a lawsuit.
- Your case must be strong enough to win.
- Insurance limits and the carrier must be known.
- Your case must be worth over $50,000.
Of course, there are more requirements that funding companies use to assess the credibility of your lawsuit. But the criteria mentioned above should give you an idea of what they will be looking out for; thus, you are better prepared to get funding from your case when you need it.
The amount of money you can receive from your expected settlement mainly depends on the strength of your case and other additional factors. These factors typically vary depending on state laws and restrictions imposed by the funding provider you select to work with and due to policies and safety nets to protect lenders and consumers.
Understandably, you would want to have the most control over your settlement value possible because it is legally yours. Nonetheless, obtaining more than 10% in pre-settlement funding is not suggested because you don’t have any guarantee about the amount of your award nor if you will surely win it.
If you are having difficulty keeping up with your bills and choosing the best pre-settlement funding company is becoming overwhelming, look to Baker Street Legal Funding. You don’t have to lose sleep over paying medical bills and keeping up with other living expenses such as feeding and rent while your case is pending. With Baker Street Legal Funding, you will get simple interest capped in the third year, all in a matter of 24 hours from when your attorney provides your case information.
Looking for a prequalification? Apply for pre-settlement funding with Baker Street Legal Funding. Get from from $1,500 – $2,000,000+ upon approval. If you don’t win your case, you are not under any obligation to repay both the principal (loan amount) and interest.