Pre Settlement Funding – What You Need to Know


Pre Settlement Funding can Help

Lawsuits can take years to produce a verdict or for the parties to agree on a settlement. If you are suing for compensation and damages, you may not be able to survive the long wait. – Pre settlement funding can help/

Most lawyers are well financed and can comfortably take their fee after you win your case, You, on the other hand, may have all sorts of bills piling up at home.. When paired with lost income – either temporary or permanent – the results can be devastating to your finances.

You don’t need to let the debt accumulate while you wait for your settlement. Avoid the hole in the first place by considering pre-settlement lawsuit funding.

Here are the most common questions plaintiffs have about these loans.

1. What is Pre-Settlement Lawsuit Funding?

Pre-settlement lawsuit funding is a transaction in which a funding firm buys a portion of your future expected lawsuit settlement and gives you the cash upfront.

When your settlement arrives, and the check clears, they receive the portion they purchased.

2. Is it a Loan?

Lawsuit funding isn’t a loan. Although it looks like a loan on the surface and some people refer them to colloquially as lawsuit loans, there’s a significant difference: you always need to re-pay a loan from a bank or another lender.

With pre settlement funding, if you don’t win your case, you don’t repay anything at all. The money was 100% free. The funding company takes all the risk. That sounds pretty good!

Lawsuit Loans


3. Does My Case Qualify for Funding?

Pre-settlement funding is available for personal injury claims where you have been harmed or injured in some way. You are suing the defendant and seeking compensatory damages

The claims typically funded include:

A good rule of thumb to judge as to whether your case qualifies is quite simple. Ask yourself the following questions. Be truthful now! Was I actually harmed in some measurable way? Is there an excellent chance my case will win? Does the defendant have adequate insurance? Did my attorneys file a valid lawsuit? Do I have good attorneys? If you can answer-yes-to all those questions, then you can be pretty sure you will be approved for funding.

4. How Much Can I Borrow?

The amount you may borrow depends upon an analysis of the expected  you will receive at the end of your litigation.

When you apply for funding, the buyer considers:

  • Your attorney’s estimate of your eventual settlement
  • The funders evaluation regarding the strength of your case
  • The length of time the case could take to complete.
  • If there were any offers made by the defendant.
  • All of these factors determine the risk of your case. Why is the funder so careful? Because the funding company loses if you lose, they want to minimize their losses while still providing a helpful service.

Expect an offer to make up about 10 to 20 percent of your total settlement estimation.

5. How Quickly Do I Get the Money?

Lawsuit Funding Advances


While banks use an underwriting process that takes one or more weeks, lawsuit funding firms take a different and more efficient approach.

They will speak to your attorney – and perhaps ask their legal team – to provide documents relating to your case. The process moves along faster if your attorney cooperates and if your case is clear cut. Unusual cases like Trademark cases are much more difficult to get approved.

However, funding companies always aim to get you the money ASAP.

6. What if I am Representing Myself?

If you are representing yourself in small claims court or mediation, then you will not be approved for lawsuit funding. The same is true if you haven’t yet hired an attorney for your case.

Lawsuit funding companies need to know about the validity of your case before they can get invol;pved.

7. Do I Need to Provide My Personal Details?

Lawsuits are often full of sensitive information that you want to share with no one but your attorney.

The research needed for funding doesn’t require your attorney to breach attorney-client privileges.

Funding researchers always want to know the same things:. They are not interested in your personal details.

  1. How strong your case is
  2. How much you might win
  3. How long the case will take

Answering these questions doesn’t require the team to walk through the case step-by-step or learn any private information you divulged to your attorney.

8. Do I Need My Attorney’s Permission?

Yes, in a manner of speaking, you do.

An attorney’s cooperation is critical to the research required to secure your funding.

If you receive an offer you want to accept, then your attorney must also sign the “Acknowledgement by Counsel” form. They must sign the form because funding company and your attorney work together to settle the debt once you receive your settlement.

The attorney is never signing on th the debt nor is he ever responsible financially.

9. Do I Need to Pay Any Fees?

Yes, you will pay a fee and cost of the loan on your settlement advance. However, it is not due until your settlement check comes in.

All the fees included in the lump sum are made clear in your quote and again in your contract agreement. You should structure your borrowing around those fees, particularly if much of the settlement money is already earmarked for other debt or bills that occurred before, during, or after your lawsuit.

Litigitimate lawsuit funders will never charge a fee to investigate your case and provide you with a quote. So the quote is always free.

10. Is There a Credit Check Involved?



No, there is no credit check required.

The purchase isn’t contingent on your ability to pay back the sum over a fixed term. So, there’s no need to worry about your credit, income, or any other financial items. You don’t even have to be employed.

Skipping the credit check can be a relief for those going through a lawsuit because personal injury suits so often involve some type of incapacity to earn.

11. What Happens if I Lose or if My Settlement is Far Lower than Expected?

If you lose or your settlement comes in at an amount vastly lower than you expect, then you don’t need to do anything.

The buyer assumes the risk when they agree to purchase part of your settlement.

12. How Does the Buyer Get Repaid?

When you receive your settlement, your attorney will take out the required funds to pay themselves and to pay the buyer. They do this before you get the check, so you don’t need to worry about getting in touch to return the money.

Is Pre-Settlement Funding Right for You?

Pre-settlement lawsuit funding offers a chance for you to get some of your settlement before your case ends. For many plaintiffs, cash advances provide a huge relief because the damages of many personal injury lawsuits are the financial burdens associated with the injury.

Funding isn’t right for everyone, and you need your attorney to get on board to qualify. Do you have more questions about getting an advance on your personal injury settlement? Contact us for more answers.

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