
Getting compensation for injuries and property damages can be a lengthy and costly process. Plaintiffs who settle their cases often wait up to a year before receiving any money. If you need immediate funds, pre-settlement funding might be a solution.
Pre-settlement funding, also known as litigation financing, provides an advance on financial losses from personal injury or property damage cases. Terms of pre-settlement funding vary by state, and most agreements require the lender to take court action to recover their funds if the case is successful. Below, we explain how pre-settlement funding works and help you decide if it’s the right option for your situation.
How to Qualify for Pre-Settlement Funding
To qualify for pre-settlement funding, you must be involved in a personal injury lawsuit and have completed the discovery phase of litigation, where both sides share evidence. You will also need to demonstrate a strong case by providing proof of injury.
Lenders will evaluate the type of case and how it’s likely to be handled. Some cases may be easier to fund than riskier ones like medical malpractice. Requirements vary based on the specifics of your case.
Reasons to Consider Pre-Settlement Funding
Pre-settlement funding can be helpful for plaintiffs who need quick access to cash while waiting for their case to settle. Litigation costs can add up, and this funding can help you manage financial challenges, such as medical bills, lost wages, or other urgent expenses. It acts as a “rainy day” fund, preventing financial distress during the legal process.
Cases Eligible for Pre-Settlement Funding
Pre-settlement funding may be available for a wide range of personal injury or property damage cases, including:
- Automobile accidents
- Construction accidents
- Medical malpractice
- Slip and fall cases
- Real estate disputes involving property damage
These cases often involve significant expenses, and pre-settlement funding can provide financial relief while awaiting resolution.
How Pre-Settlement Funding Works
The process starts by understanding your state’s laws regarding pre-settlement funding, as it’s often available only through the plaintiff’s attorney. A personal injury lawyer can help connect you with a lender. You can also consult your state’s bar association for legal resources.
Once connected with a lender, you will sign a funding agreement outlining the terms and your responsibilities. It’s essential to review the contract carefully and have your attorney review it before signing, as it is legally binding.
Pros and Cons of Pre-Settlement Funding
Pros:
- Provides quick access to funds
- Helps cover urgent expenses like medical bills
- Allows you to pursue your case without financial strain
- If you win your case, you receive the full awarded amount
Cons:
- Fees may apply, covering the cost of setting up the funding and recovering the funds through a lawsuit
Best Pre-Settlement Funding Companies
When selecting a pre-settlement funding company, it’s important to choose one that is reputable and financially sound. Some of the top companies include:
- Oasis Financial
- Peachtree Financial
- Express Legal Funding
- LawCash
- High Rise Financial
- Legal Capital
These companies are known for their reliability and customer service. Be sure to read the agreement carefully, including the fine print, before making a decision.
Conclusion
Pre-settlement funding can help you cover living expenses and medical bills while waiting for your case to settle. If you’re facing financial hardship during the legal process, it may be worth considering. Be sure to start the process as soon as possible and consult with your attorney to ensure it’s the right option for you.