One awful downside of having an ongoing claim which may lead to litigation is the danger of incurring a huge amount of debt to keep up with life’s expenses. It can be costly especially if your case has caused you serious physical harm.
Pre-settlement funding can help you cover the bills related to life that are slowly piling up while your income is affected and as you continue to treat and wait for a settlement on your personal injury case. However, there is a lot of misunderstanding regarding the nature of a pre-settlement cash advance.
This blog aims to clarify what a pre-settlement funding is, what costs it entails, when you should consider applying for one and how to choose the best funder for your needs.
What is Pre-Settlement Funding?
Pre-settlement funding, otherwise known as a lawsuit cash advance, is an arrangement that provides the plaintiff with a certain amount of their expected settlement even before their case is concluded.
Is Pre-Settlement Funding Classified as a Loan?
There is a common misconception that a cash advance for a lawsuit is a loan. The proper term for it is “non-recourse cash advance”. This is because the funder does not require you to pay back the amount you borrowed if the case does not succeed.
You will only pay back the amount you owe along with some extra charges, we call usage fee, if you win your lawsuit and receive compensation.
What to Expect in Pre-Settlement Funding Costs
Reputable lenders will enumerate the overall cost structure so you can do an initial assessment if the cost is something you can afford to shoulder after the whole litigation process.
Key Considerations When Inquiring About Lawsuit Cash Advances
- A simple interest rate can lessen the overall cost.
- Capped rates will prevent your future repayment amount from becoming too excessive. A rate cap will ensure that your payback amount will remain the same regardless of how long it takes to settle your case.
- The company’s annual percentage rate (APR) will give you a clearer picture of how much interest you will be charged in a year. You may also ask for a 6-month to a full schedule and computation so you can determine which structure will work best for you.
When Should You Consider Pre-Settlement Funding?
There are some cases that achieve quick resolution and allow the plaintiffs to receive compensation for the injury, accident or negligence that they experienced. If you wonder whether or not you should apply for pre-settlement funding, here are some situations that can indicate a need for lawsuit cash advance.
Bills are piling up
If you’re missing out on your monthly rent, utility bills and other recurring expenses, it might be a sign that you need financial assistance to ease the pressure of not being able to pay your bills on time.
You need more time to negotiate a fair settlement
One problem that many plaintiffs face is they settle too early and too fast for a compensation that barely covers for the damage caused to them. You can avoid agreeing to a lowball offer by using a pre-settlement fund to support you, allowing the law firm to continue the negotiations to increase the settlement offer.
The income from your work is not enough
Sustaining physical injuries due to accidents or medical malpractice would mean that your capability to work is either reduced or you are temporarily unable to resume. This will negatively impact your finances since you have to pay for hospital care while having to consider your food, water and electricity and other costs of living.
How to Choose a Pre-Settlement Funding Provider
Consider their years of experience
A funding provider with years of experience in the industry shows that they handle their clients well and are trusted by the public. In addition, this will assure you that they have the financial capacity to wait for the litigation resolution and will not pressure you into accepting a deal prematurely.
They charge reasonable rates and processing time
Compare all the companies that you will possibly consider applying to. Choose the one with the lowest interest rates, processing fees and other extra charges. They should be able to explain the fees they charge and how much they will be taking from your settlement check after the lawsuit is resolved. Furthermore, consider working with a company that understands your needs in terms of a decision that fast to get you the funds you need in your bank.
They practice transparency
Transparency is a crucial quality to look for in a pre-settlement funding provider. From the application process to the final repayment, a reputable provider should be upfront about every aspect of the funding agreement. In fact, they should provide clear, written documentation outlining the terms of the funding, including interest rates, fees, and repayment conditions.
Final Thoughts
Pre-settlement funding can be a valuable financial tool for plaintiffs facing long legal battles, offering much-needed support to cover essential expenses while waiting for a fair settlement. However, it’s crucial to approach this option with a clear understanding of what it entails. By knowing that pre-settlement funding is not a loan and being aware of the costs involved, you can make informed decisions that align with your financial needs.
Whether you’re struggling to pay bills, need more time to negotiate a fair settlement, or find your income insufficient due to injury, this financial assistance can help you maintain stability during your legal journey.
Fund Capital America’s Lawsuit Cash Advance
Fund Capital America is here to help. Whether you’re dealing with an automobile accident, pedestrian knockdowns, motorcycle and bicycle accidents, burn injury accidents, nursing home negligence, or police brutality cases, and other accidents that were not your fault, we have the resources to back you. Don’t wait—contact us today to learn how our pre-settlement funding can support your legal journey.
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