How Does Pre Settlement Funding Work?

Dealing with a personal injury lawsuit can be a stressful and financially burdensome experience. Medical bills, lost wages, and other expenses can quickly pile up, leaving plaintiffs in a difficult position. In such cases, pre settlement funding can provide much-needed financial relief. This article will explain what pre settlement funding is, how it works, and answer some frequently asked questions about this type of funding.

Pre settlement funding, also known as lawsuit funding or lawsuit loans, is a financial service that provides cash advances to plaintiffs involved in a personal injury lawsuit. Unlike traditional loans, pre settlement funding is not based on credit history or employment status. Instead, it is based on the potential settlement or verdict of the lawsuit.

The process of obtaining pre settlement funding is straightforward. The plaintiff applies for funding through a pre settlement funding company. The company evaluates the merits of the lawsuit, the expected settlement or verdict amount, and the likelihood of success. If approved, the plaintiff receives a cash advance, typically within a few days.

The repayment of pre settlement funding is contingent upon the outcome of the lawsuit. If the plaintiff wins or settles the case, they are required to repay the funding company, along with any agreed-upon fees and interest. However, if the plaintiff loses the case, they are not obligated to repay the funding.

Here are some frequently asked questions about pre settlement funding:

1. Is pre settlement funding a loan?
No, pre settlement funding is not a loan. It is a non-recourse cash advance based on the potential settlement or verdict of the lawsuit.

2. What can I use pre settlement funding for?
You can use pre settlement funding for any expenses you may have, such as medical bills, living expenses, or legal fees.

3. How long does it take to receive pre settlement funding?
Once approved, you can typically receive pre settlement funding within a few days.

4. Do I need to have good credit to qualify for pre settlement funding?
No, pre settlement funding is not based on credit history. Approval is primarily based on the merits of the lawsuit.

5. How much pre settlement funding can I receive?
The amount of pre settlement funding you can receive depends on the expected settlement or verdict amount of your lawsuit.

6. Will obtaining pre settlement funding affect my lawsuit?
No, obtaining pre settlement funding should not affect your lawsuit. It is a separate financial transaction.

7. Do I need to repay pre settlement funding if I lose my case?
No, if you lose your case, you are not obligated to repay the pre settlement funding.

8. Can I apply for pre settlement funding if I already have a lawyer?
Yes, you can apply for pre settlement funding at any stage of your lawsuit, whether you have already hired a lawyer or not.

9. Are there any upfront fees or hidden costs?
Most reputable pre settlement funding companies do not charge upfront fees or hidden costs. However, it is important to review the terms and conditions of the funding agreement before proceeding.

In conclusion, pre settlement funding can provide financial relief for plaintiffs involved in personal injury lawsuits. It is a non-recourse cash advance based on the potential settlement or verdict of the lawsuit. By understanding how pre settlement funding works and considering the frequently asked questions, plaintiffs can make an informed decision about whether it is the right option for their financial situation.