What is Pre-Settlement Funding?

When you’re the plaintiff in a lawsuit, such as one involving a personal injury claim, you’re likely hoping to win a judgment or settlement as the result of your case. The downside is that it can take a long time to actually go through all of the legal channels and finalize your case. You may need cash in the meantime to help pay your bills. Instead of applying for a loan to pay your bills, you can apply for a cash advance on your pending lawsuit. 

How exactly does pre-settlement funding work? 

Once you apply, the settlement funding company will communicate with your attorney about the details of your case. This evaluation gives them a good idea of how much money you can expect to receive either from a trial or a pre-trial settlement. With this information, the company then fronts you with a portion of those proceeds. Once your case is finalized, your advance will be repaid out of the settlement amount, in addition to a funding fee. That means you won’t receive the entire settlement amount, but you do get the advantage of receiving a bulk of the funds upfront.  

In most cases, you don’t pay anything to the legal funding company until you receive your settlement. If you don’t receive any settlement at all, you won’t be responsible for repaying any of the cash advance you received. Part of the funding company’s responsibility is evaluating the odds of your case, so they carry the risk if you aren’t awarded anything. So while it may sound like a structured settlement loan or lawsuit loan, it’s really not because there’s no repayment if you’re not awarded the funds to cover the balance. 

How to Choose the Best Cash Advance Settlement Company

There are a few different things to consider when choosing a cash advance settlement company.  

  • Check to make sure they operate in your state. They don’t need to be located in your state, but they should be licensed to do business there.  
  • Compare offers. Different companies may offer to give you a different percentage of your predicted settlement amount.  
  • Find out how much interest they’ll charge you each month before you receive your settlement funds. This is extremely important because it directly impacts how much money you could potentially receive once your case is resolved. 
  • Look at how frequently the company compounds the interest. This can add up quickly and interest that is compounded daily or weekly will be more expensive than a longer compounding term when all other things are equal. 

No matter how much financial need you’re in, do be sure to carefully compare offers to make sure you’re making the best decision. You can always ask your attorney for help or meet with a financial advisor if you’re not sure what everything means. A reputable legal advance company should also have a stellar customer service team that can explain everything in clear terms to give you a better idea of what to expect. 

Usclaims

USClaims is a litigation cash advance provider that offers experience and transparency. With claims fees as low as 2% each month, you can get funding in 48 hours or even less. They fund an extremely wide range of cases for personal injury victims, including anything from medical malpractice to employment discrimination. 

The application process is simple: simply submit an application form and from there a representative from USClaims will review your documentation. If you’re approved, you can sign a purchase agreement and receive your cash advance within one business day. In most cases, you could get pre-settlement funding for up to 10% of the value of your case.  

Rating: 5
Oasis FinancialWhen your application gets approved by Oasis Financial, which has an A+ BBB rating, you’ll get funded within 24 hours. Advance amounts range anywhere between $500 and $100,000. Their eligible case list is substantial, meaning if you’re the plaintiff in an existing case seeking settlement, there’s a strong chance you’re eligible to apply.  
Rating: 4
CaseAdvanceCaseAdvance boasts a quick turnaround time and efficient processing when it comes to your pre-settlement cash advance. There’s no application fee and you’re not obligated to accept an offer from CaseAdvance once you learn your settlement offer and fee. This makes it a risk-free experience from start to finish. 
Rating: 4

How to Qualify

Different companies have different criteria when it comes to qualifying for a settlement advance. At a basic level, you need to have already filed a lawsuit as a plaintiff with an attorney on board representing you. You may also be eligible if you’ve already won your lawsuit or reached a settlement agreement and are simply waiting to receive your funding. Some companies may also have a maximum amount that they’re allowed to fund. 

The type of lawsuit you’re involved in also influences whether or not you qualify. Common incidents include auto accidents, worker’s comp and negligence, premises negligence, and wrongful death.  

Legal Funding Costs

Remember that unlike legal loans, you don’t pay anything for your lawsuit cash advance unless you end up receiving a settlement from your case.  At that point, you’ll first need to pay prioritized expenses which include like your attorney’s fee, court costs, and any medical liens.  

After that, your pre-settlement funding company is paid the amount they gave you, plus a monthly interest rate based on however long it took for the lawsuit to be resolved. If the amount exceeds what you have leftover from your settlement, the company receives what is left and you are not responsible to pay the difference. If you have settlement funds after everyone has been paid, you get to keep the remainder of the cash. 

Pros and Cons of Lawsuit Cash Advances

There are both advantages and disadvantages of pursuing a lawsuit cash advance and understanding both can help you make a smart financial decision for your personal situation. 

Pros

  • Get financial security now, which is especially useful if you have an influx in bills or are unable to work
  • Avoid debt or even bankruptcy by getting settlement funds upfront during an emergency
  • Don’t feel as pressured to take the first settlement offer you receive as part of the legal process
  • Give your lawyer more time to advocate on your behalf and even potentially take the case to trial if you don’t receive a fair settlement offer

Cons

  • There is a cost involved because there’s a risk that you might not get a settlement or win your case
  • You don’t have to pay out of pocket, but you will end up paying them more out of your eventual settlement
  • Not everyone qualifies for pre-settlement funding
  • You may have to shop around to a few different places to get an offer

F.A.Q.

Is there a pre-settlement payment limit?

Yes, each individual company has its own cash advance limit. First, companies have a limit on the percentage of your expected settlement value, usually ranging between 10% and 20%. So if they decide your potential settlement will amount to $50,000 you can expect offers between $5,000 and $10,000. Many companies also have a dollar amount limit and won’t advance funds over a certain number.

How long does it take to get legal funding?

The timeline varies by company and also depends on how quickly your attorney can give them pertinent information about your case. Once your advance is actually approved, you can typically expect to receive funds within 1 to 2 business days.

Do you need good credit to qualify?

No, credit is not a factor in the settlement funding application process because you’re not responsible to repay the funds if you don’t win your case. If you do win your case, there is a purchase agreement in place that allows for the cash advance company to receive the payout directly from your settlement funds.

Is pre-settlement funding the same thing as a legal loan?

No, a legal loan or lawsuit settlement loan is not the same thing as pre-settlement funding, because you’re not borrowing money. Instead, you’re getting a cash advance based on a settlement that you’re deemed likely to be awarded.

Do you need an attorney?

Yes, you do need an attorney in order to apply for pre-settlement funding. Their details on your case help inform the application process as well as the expected settlement value. If you’re interested in a cash advance but don’t have a lawyer, it may be time to get one.

Call USClaims today to get pre-settlement funding for your personal injury claim.

Get a Free Quote Call (888) 505-2234