Everything You Need to Know About Pre-Settlement Funding
Are you having a hard time covering bills while waiting for your lawsuit to settle? Read on to learn all about pre-settlement funding and how it can help.
Are you in litigation that looks like you have a solid case to win a settlement in a lawsuit but need the cash right away?
Lawsuit settlements rarely take into account that the average person doesn’t have the cash to pay for a litigator, take time off for court dates, and pay their bills. Life is expensive – and lawsuits are even more so.
Pre-settlement funding, or a lawsuit advance, loans plaintiffs money to cover bills – or anything else – before a settlement.
Is this type of funding the answer to your problems? Keep reading to learn more about what it is and how to use the service.
What Is Pre-Settlement Funding?
Pre-settlement funding is also known as a
- lawsuit loan
- lawsuit advance
- personal injury loan
- car accident loan
- non-recourse advance
- non-recourse loan
The basic premise of the service is to advance a plaintiff a fraction of the anticipated settlement. You don’t need a judgment to request this funding. Services fund it even before the court makes the final decision.
If a settlement company agrees to finance your case, you’ll sign a contract agreeing to pay back the advance with interest.
If the case doesn’t result in a settlement, your contract won’t ask you to pay anything at all.
Fees and Interest
Pre-settlement funding isn’t considered to technically be a loan because companies don’t require you to pay them back if you lose or the settlement doesn’t materialize.
However, advances mimic loans because they come with interest and fees. Each varies according to the company providing the funds, your court case, and the size of the sum offered.
It is important to be aware of the fees and interest during settlement negotiations if you accept a settlement advance. Be wary of how much would go back to the funder and keep it in mind if you must use the final sum to pay other bills.
What Do You Need to Apply for Funding?
Pre-settlement funding isn’t a loan. Your creditworthiness doesn’t matter, and no credit checks are required because payments don’t hinge on your projected income but the settlement
Instead of raking through your finances, a funder will want documentation about your case including details from your attorney.
The decision to lend you the money depends on whether the funder thinks your case is winnable and how much they believe you’ll receive in a settlement.
Some Things to Consider Before Accepting Funding
Pre-settlement funding can be a lifesaver, but don’t walk into a contract with your eyes closed.
First, think about how far away your potential settlement is. Interest compounds over time and an agreement that’s years away can cost more in interest.
Second, only borrow what you need. Ask for enough to cover your essential costs. Remember that a lower balance means less interest.
Finally, don’t settle for a lower payout because the funds covered your immediate needs. Work with your representation to get what you need.
Get the Help You Need Today
Pre-settlement funding helps make ends meet as you wait out a court case. If you win, you pay it back automatically. If you lose, you don’t pay a dime.
Do you need a quick cash injection as you wait for a settlement? We want to help.
Get in touch with our customer service representatives today.