A majority of civil cases take several months or even years before they are settled. This process can be tedious and financially crippling, especially if the loss of employment or income source is involved. This means you need to find a way to meet your financial needs as you wait for your case to be settled.
If you are cash-stranded, you can seek help from a pre-settlement funding institution. Pre-settlement funding provides you with funding to make your ends meet as you wait for the conclusion of your civil case.
How Does Pre-Settlement Funding Work?
Firstly, pre-settlement funding is not a loan but non-recourse legal funding. It’s basically selling part of your future settlement to the company providing you with the funding. Thus, when your case is settled, the attorney will directly repay the amount owed to the company.
What happens if you lose? You have nothing to worry about. As this is non-recourse legal funding, it means that you are not responsible for paying back the money provided to you. Therefore, if the case is lost, then the company cannot ask you to repay the money. Thus, nothing happens if the case is lost.
You are eligible for pre-settlement funding if your civil case falls under the following categories:
- Product liability
- Personal injury
- Premises liability
- Medical malpractice
- Wrongful death
How Much Money Can You Get?
Typically, pre-settlement funding provides 15% to 20% of the projected value of your settlement. Therefore, the amount of money you can expect to receive depends on the settlement’s total estimated value. If you happen to need more, you can apply for additional funding as long as the total amount doesn’t go above 20% of the expected total settlement.
Civil cases are usually dynamic, and thus, as they advance, more damning evidence may be discovered that is likely to push the total estimated payment up. In this case, you can also apply for additional funding, provided it does not exceed the 20% mark.
The Benefits of Pre-Settlement Funding
Early access to your settlement money can mean the difference between having to settle for a lower amount and letting your legal team fight for what you deserve. Other benefits include:
A Life-Saver in Impossible Situations
For many people, pre-settlement funds can be the solution when your personal injury claim takes time to resolve. You might also be taking some time to recover if the injury involves losing a limb or paralysis. Therefore, there is nothing that you can do to meet your financial obligations.
Quick Processing of Funds
This type of financial aid is getting very popular due to the quick process of funds, unlike other available options. The funding application and approval process can take a couple of days. Once you sign all the necessary documents, you can expect to have the money in your account in as little as a day or two.
Low-Cost Financial Aid
Numerous pre-settlement financing companies are committed to providing low-cost financing. This means that they offer the funds with no additional fees, and they have competitive interest rates. Thus, if you happen to win the case, you will pay little over what you received.
More importantly, you should only consider approaching a pre-settlement financing company that has interest rate caps. This means that they will not raise their interest rates if the case takes longer than expected to be settled. Increasing interest rates can leave you with nothing when the case is settled if it takes a long time.
How to Get a Good Pre-Settlement Funding Deal
No matter how lucrative a pre-settlement funding offer may be, it’s important to go through all the details of the agreement. You should have an experienced lawyer to help you understand the legal jargon used in the agreement. Moreover, be sure to compare offers from more than one pre-settlement funding company to find the right one for you.
