If a personal injury has caused you financial burdens, you may be wondering what options you have while you wait for your case to settle. Traditional bank loans are almost impossible to secure after an accident, especially if you are out of work due to your injuries. Credit cards can provide relief on a short term basis, but they may not make financial sense in the long run, and borrowing money from a friend or family member is not an option for most people. Fortunately, you can borrow money based on a pending lawsuit, through lawsuit funding.
What is Lawsuit Funding?
Lawsuit funding, also known as a pre-settlement cash advance, was designed to help people involved in personal injury suits ease their financial burdens while they wait for their case to settle. It is understandable that money can be tight after an accident. It can take months, or even years, to settle with insurance companies, and most people do not have the means to cover expenses for an extended period of time, especially if they are out of work. When living expenses and medical bills pile up, many turn to lawsuit funding for assistance.
While you are technically borrowing money with lawsuit funding, the money is not a loan. It is a non-recourse investment in your case. The funding provider is buying the right to a portion of your settlement. There are usually no monthly payments associated with a pre-settlement cash advance. When you do receive your settlement, you pay back the advance along with interest.
Keep in mind that interest rates through lawsuit funding are higher than with a traditional bank loan. Because of this, it is often best to exhaust other resources before considering a pre-settlement cash advance. Thankfully, the higher interest rates allow most lawsuit lenders to provide the money risk free. This means that if you don’t win your case, you owe the lender nothing and you’re free to keep the money, no questions asked.
In many cases, lawsuit funding may also help you secure a higher settlement. When financial resources are tight and bills are piling up, you may be more willing to settle your case quickly, and for much less money than you deserve. A cash advance through a lawsuit funding provider may help to ease financial burdens and allow you to hold out for the best possible settlement for your case.
How Can You Secure Lawsuit Funding?
Most lawsuit lending providers have three basic criteria for pre-settlement funding:
- You have a pending personal injury case.
- You are working with an attorney.
- You are at least 18 years of age.
If you meet these criteria, you most likely qualify for lawsuit funding. People involved in auto accident, premises liability, or assault cases commonly receive lawsuit funding to cover living expenses while they wait for their settlement.
Before you apply for a lawsuit loan, there are a few things to consider. First, speak with your attorney about the likelihood of settlement, and when they predict settlement will happen. This will give you a good idea of how much money you may need to cover expenses. It may be tempting to borrow as much money as possible, but with higher interest rates, that may not be a wise decision. Next, make sure that you are working with a reputable company. Do not sign any contracts that don’t explicitly state the terms of your agreement, including a payoff table that shows what you will owe according to settlement date.
The process to apply is easy with many lawsuit lenders. You can often apply online or over the phone. You must be working with an attorney, as they will be contacted to provide some basic details of your case. Typically, a phone call is all that is needed, but occasionally, your attorney may be asked to provide additional documentation about your suit. Once the lender has the facts of your case, an underwriter will review them and can provide approval in 1-2 days. In many cases, you can receive a pre-settlement cash advance within 24 hours of approval!
Underwriters determine the amount of funding based on the value of your personal injury case. These cash advances typically range from $500-$100,000. There are no restrictions on how you spend your pre-settlement cash advance, though most people use the money to pay for living expenses like rent and utilities. Unlike banks that offer traditional loans, lawsuit lenders should not verify your employment or check your credit score. Your financial history has no bearing on funding. Only the facts of your pending lawsuit matter to lawsuit lenders.
Yes, You Can Borrow Money Based on a Pending Lawsuit!
You can borrow money based on a pending lawsuit. If you have a pending personal injury case and you need money to pay for living expenses and medical bills, you may want to consider lawsuit funding. Unlike bank loans, your financial history is not considered, and there are no monthly payments. If you don’t win your case, you owe the lawsuit lender nothing. Once you are approved, you’ll have money right away, and you’ll gain financial peace of mind to wait while your attorney negotiates the settlement you deserve.