Pre Settlement Lawsuit Funding

Shay Morrigan | December 24th, 2012

If you are a plaintiff in a personal injury lawsuit, you may find that money gets tight as you’re waiting for a settlement or a verdict. Lawsuits can go on for months or even years, and if you are unable to work because of your injury, or are facing additional medical expenses, you may need financial assistance.

Unfortunately, banks and credit unions do not provide loans when you have only your potential lawsuit recovery as collateral. A lawsuit funding company, however, provides no-risk cash advances, called “pre settlement lawsuit funding,” to help you through the litigation period. If you lose your case, you owe nothing.

What is pre settlement lawsuit funding?

Pre settlement funding is a cash advance or non-recourse funding provided to a plaintiff in a personal injury lawsuit, based on the expected positive outcome of the case. A lawsuit funding company provides you the funds in return for a promise to repay the advance after the lawsuit settles, or a victory occurs in court.

The funding is not considered a “loan,” however, even though it is sometimes called a pre settlement funding loan or lawsuit loan. There is no credit check, as the anticipated settlement acts as collateral to secure the loan. If you do not receive any settlement funds as a result of your case, you have no obligation to repay the money advanced to you.

What’s the difference between pre settlement loans and post settlement loans?

If you are involved in a pending lawsuit, you may require pre settlement lawsuit funding to help you get by until the final decision is made in the case. Sometimes, however, even after you are awarded a verdict or negotiated a successful settlement, it may take months or years before you are actually paid the funds owed to you.

The defendant may choose to appeal, which would tie up your funds, or the monthly payments set up in the settlement agreement may be too low to meet your needs. During this time, you may have nothing but a document with numbers on it proving that you’re owed the money. A legal funding company can use that document as collateral to grant you a post settlement loan—a cash advance on the funds promised to you.

Lawsuit funding company considers certain factors for approval

When considering how much money you may qualify for in a pre settlement loan, a lawsuit funding company typically takes many factors into consideration:

  • The strength of your case—if your case is likely to succeed in court
  • If the settlement is collectable—if the defendant in your case has the available funds to pay a settlement
  • If your attorney is cooperative, and helps the legal funding company understand the facts of your case
  • If it is clear from the evidence in the case that the defendants will likely be held liable
  • You have provable expenses as a result of the injury, such as hospitalizations, surgeries, required therapies, etc.

Ultimately, each lawsuit loan company uses their own financial equations and legal understanding to determine whether or not you qualify for pre settlement lawsuit financing.  One company may be able to advance you more money than another. Typically, the amount falls somewhere between 10 and 15 percent of the projected final settlement amount. Your credit standing, job status, and other debt, however, are irrelevant to the process.

LawStreet Capital provides competitive pre settlement loans

If you’re under financial strain while undergoing a personal injury lawsuit, you may be tempted to settle for less than you deserve. Before making that decision, contact LawStreet Capital. We offer competitive rates and fast, no-hassle approvals. Call toll-free 800-345-8500.