What Is Pre Settlement Funding?
Pre settlement funding, also known as lawsuit funding or litigation financing, is a financial arrangement where a third-party company provides cash advances to plaintiffs who are involved in pending legal cases. This funding is intended to help plaintiffs cover their immediate financial needs while they wait for their case to settle or reach a verdict.
How Does Pre Settlement Funding Work?
When a plaintiff applies for pre settlement funding, the funding company evaluates the merits of the case and the potential settlement or verdict amount. If approved, the plaintiff receives a cash advance, which is repaid from the future settlement or judgment proceeds. In essence, it is not a loan but rather a non-recourse advance, meaning the plaintiff only repays if they win their case.
FAQs about Pre Settlement Funding:
1. How is pre settlement funding different from a traditional loan?
Pre settlement funding is not a loan because the plaintiff is not obligated to repay the advance if they lose the case. A loan, on the other hand, requires repayment regardless of the case outcome.
2. What can pre settlement funding be used for?
The funds obtained through pre settlement funding can be used for various purposes, such as medical bills, living expenses, legal fees, or any other financial obligations.
3. Is credit history a factor in obtaining pre settlement funding?
No, pre settlement funding is based on the merits of the case, not the plaintiff’s credit history or employment status.
4. How long does the pre settlement funding process take?
The process can vary depending on the funding company, but typically it takes a few days to evaluate the case and provide the funds once approved.
5. What happens if the case is lost?
If the plaintiff loses the case, they are not required to repay the pre settlement funding. The risk is solely on the funding company.
6. Can pre settlement funding be obtained for any type of legal case?
Pre settlement funding is available for various types of cases, including personal injury, medical malpractice, product liability, and employment discrimination, among others.
7. Is pre settlement funding available in all states?
Pre settlement funding is available in most states, but regulations may vary. It is essential to consult with a reputable funding company to determine eligibility based on your specific location.
8. How much funding can I receive?
The amount of funding depends on the merits of the case and the potential settlement or judgment amount. Typically, funding companies offer advances ranging from a few hundred to tens of thousands of dollars.
9. Can I apply for pre settlement funding if I already have a lawyer?
Yes, pre settlement funding can be obtained regardless of whether you have an attorney. However, having legal representation may increase your chances of securing funding.
In conclusion, pre settlement funding provides financial relief to plaintiffs involved in pending legal cases. It allows them to meet their immediate financial needs while their case is ongoing. The non-recourse nature of this arrangement makes it a viable option for plaintiffs who require financial support during the litigation process. However, it is essential to carefully evaluate the terms and conditions of any pre settlement funding agreement and seek advice from a qualified attorney before proceeding.