Getting a cash advance on your lawsuit and future settlement is perfectly legal and a common practice these days. There are many lending companies like FCA Legal Funding that can help. When you file a lawsuit, claims can take a while to resolve, while financial difficulties prevail and there are living expenses to cover. A cash advance on a pending lawsuit is therefore a practical solution.
Know the Cost of Borrowing Against Future Proceeds
A cash advance (also known as a lawsuit loan, litigation funding, or settlement funding) can help pay for high medical bills, loss of income, and more. You typically receive money from the lender immediately and pay it back out of the proceeds of your settlement. Payments are typically not required before the case settles.
Lawsuits can take years to resolve. Since a lawsuit cash advance is a high risk (if your case loses, the lender doesn’t get paid), there are high-interest rates to consider. Funding fees are also charged. They can run 2% to 4% per month, yielding an annual percentage rate from 27% to 60% or higher. This means you could end up paying two or three times more than you originally borrowed.
Plus, the loan is paid from the settlement funds after attorney’s fees, litigation expenses, and medical liens are paid. The lender’s payment requirements can then be satisfied.
What Happens If My Settlement Amount Is Less Than What I Owe?
Borrowing money ahead of your settlement has many benefits. But there’s always a risk the lawsuit won’t end in your favor. It could fail or settle for an amount less than what you borrowed plus interest and fees. Typically, you won’t be required to pay more out of pocket if the settlement amount is lower than what you owe. That means if you end up getting nothing from the settlement, you won’t need to pay the lender thousands of dollars of your own money.
When Is the Strength of My Case in Question?
Taking a cash advance on a pending lawsuit may be too expensive or harder to obtain if:
- You don’t have that strong a case.
- The injuries sustained are not that severe.
- Multiple victims file claims with the insurance company.
- The law firm representing you has a low chance of success.
- A lower settlement amount is anticipated.
Cases in which you’re more likely to be approved for a cash advance include when you need multiple surgeries due to an accident injury. Medical malpractice, wrongful death, and cases against commercial or government entities are also more likely to get funded.
What Role Does My Attorney Play?
Lawsuit cash advance lenders usually need to contact your attorney to review your case file. If taking out a loan is your intention, let your lawyer know beforehand. This can speed things up as they’ll be quick to respond to any requests by the lending organization. The lender will need medical records, ambulance reports, police reports, insurance limits, and details on the case’s current value, among other documents.
Contact FCA Legal Funding
You can easily apply for a cash advance on a pending lawsuit if you have a car accident, medical malpractice, slip and fall, or wrongful death claim. Simply provide us with the details of the accident and your attorney’s contact information so we can gather the appropriate data. Funds are quickly approved, often on the same day, so you can cover expenses including rent, food, car payments/repairs, medicines and health care, family obligations, and more.
Feel free to submit your application online. For more information about our process, learn about how it works or call 855-870-2274 today.