Settlement Funding Explained
Settlement funding, also known as settlement loans or legal funding, provides immediate cash advances to individuals awaiting the resolution of a legal settlement or judgment. It allows plaintiffs to access a portion of their anticipated settlement amount before the case is finalized. The funds can be used to cover financial obligations during the legal process. Repayment is typically made from the settlement proceeds, and if the case is unsuccessful, the advance does not need to be repaid. Settlement funding offers financial stability and helps plaintiffs focus on their case without worrying about day-to-day expenses.
Lawsuit settlement funding could be a good option for you if:
- You suffered an injury at the fault of someone else
- You acquired legal representation in order to sue the responsible party
- You are in need of additional funding in order to pay for living expenses and other costs while awaiting your trial’s end
In certain circumstances, settlement funding may be worth considering for plaintiffs. However, it is important to explore other alternatives before applying for this type of financial assistance. Exhausting all other options is advisable. Before seeking lawsuit funding, individuals can consider asking family or friends for a short-term loan, utilizing credit cards to cover costs, or applying for a conventional bank loan. If the interest rates on credit cards or bank loans are reasonable, these may be more financially viable options in the long term.
How Does Settlement Funding Work?
Here are the following lawsuits you can get money from:
- A personal injury lawsuit
- A Car Crash case
- A work-related incident
- Slip and Fall
- Product liability
- Wrongful Death
- Wrongful Termination
But how do you know if you qualify for lawsuit loans with low interest rates? When you start your application, you will need to give the funding company specific details about your case. You will also need to have legal representation on your case, which you will provide the details of in your application. When you have finished applying, the funding company will review your application, determining the strength of your case, and how much settlement money you are likely to be awarded with. They will most likely consult with your lawyer to come to a final assessment.
Every case is different, however, there are no guarantees when it comes to evaluating your case. You may not be able to win an award that you are happy with, or win anything at all. This is merely an evaluation of the current facts at hand, and the funding company is essentially taking a gamble if they choose to accept your case.
Because of this, funding companies generally only accept applications who have a strong chance for success.
We do not take into account credit score when making these evaluations, because it does not impact the success of your case, and it makes the process much more seamless and efficient for all parties.
Once you are approved, success! We will get the money to you in as little as 24 hours following approval time. We send the money to you in one lump sum, so no need to worry about making monthly payments, or compounding interest rates. If you win your case, the fees and original loan will be deducted from the total amount awarded. If you lose, however, you do not need to pay it back, so the risk is low!
How to use Your Settlement Funding Loan?
In personal injury law, it is often said that while many cases are similar, no two cases are exactly alike. The same goes for accident victims themselves. Each individual has unique legal and financial needs. In most cases, individuals seek settlement funding because their injuries prevent them from working while their lawsuits are ongoing. This situation often leads to accumulating debt and limited options. Not only does this create stress for the accident victims, but it also impacts their families. In such circumstances, settlement funding can provide the necessary funds to pay medical bills and cover day-to-day expenses.
How to Use Your Settlement Funding Loan?
In personal injury law, it is often said that while many cases are similar, no two cases are exactly alike. The same goes for accident victims themselves. Each individual has unique legal and financial needs. In most cases, individuals seek settlement funding because their injuries prevent them from working while their lawsuits are ongoing. This situation often leads to accumulating debt and limited options. Not only does this create stress for the accident victims, but it also impacts their families. In such circumstances, settlement funding can provide the necessary funds to pay medical bills and cover day-to-day expenses.
What happens if I Lose the Case?
When pursuing a lawsuit, there is always a chance that things may not go in your favor. In this case, there are two possible ways to go from here.
- You don’t get anything
- Your settlement falls short and you get less than you agreed to pay back
In both cases, it is important to ask yourself, who is responsible for repayment of my settlement funding? This also depends on your original agreement. The contract, which must be agreed to ahead of getting any funding, will outline the fees and charges that will be associated, how often they are incurred, and what happens moving forward in your case.
In the event that the settlement or judgment is lower than anticipated and lower than the agreed repayment amount, the settlement funding company typically cannot demand the difference. Their claim is usually limited to whatever settlement proceeds are left after deducting other costs, such as attorney fees and court expenses.
What happens if I Lose the Case?
When pursuing a lawsuit, there is always a chance that things may not go in your favor. In this case, there are two possible ways to go from here.
- You don’t get anything
- Your settlement falls short and you get less than you agreed to pay back
In both cases, it is important to ask yourself, who is responsible for repayment of my settlement funding? This also depends on your original agreement. The contract, which must be agreed to ahead of getting any funding, will outline the fees and charges that will be associated, how often they are incurred, and what happens moving forward in your case.
In the event that the settlement or judgment is lower than anticipated and lower than the agreed repayment amount, the settlement funding company typically cannot demand the difference. Their claim is usually limited to whatever settlement proceeds are left after deducting other costs, such as attorney fees and court expenses.
Settlement Funding Benefits
Here are a few benefits settlement funding can provide:
Obtaining consumer legal funding can help alleviate financial stress in such situations and provide the necessary support for your attorney to negotiate a better deal. By accessing funding, you can avoid settling for less than what your case deserves and provide your attorney with the time and resources needed to secure a more favorable outcome.
Other Factors to Consider
While people have said in the past that funding companies go unregulated for the most part, this is no longer true! While many states choose not to regulate, funding companies still choose to follow best practices, in order to help their clients and gain reliability as a trustworthy brand and business. For a lot of people and their families, settlement funding from a legal funding company can truly provide the relief they need during their hardest moments.
In order to be best informed, however, there are a few things to keep in mind before deciding to secure a settlement loan.
- There will be certain charges in addition to your loan that will be deducted form your total award
- Sometimes, lawsuits can take one, two, or even three or more years to settle, and the fees and legal bills can add up fast. This is important to keep in mind when looking at different funding companies. Make sure you are getting the best price for your loan and shopping the lowest possible rates.
- Be aware of the specific charges and how they will impact you in the longrun
- Settlemnt funding is not just for one type of lawsuit! It can provide relief for purchasing agreements, spring forward contracts, and other types of settlement loans.
Here is an in-depth guide for each:
Purchasing Agreements
In a purchase agreement, a portion of the potential proceeds from your pending legal claim is assigned in exchange for the cash that is funded to you.
Spring Forward
While this is not a common contractual agreement, this is another form of financial relief. These agreements facilitate the sale of an asset, such as a part of your settlement, at a predetermined price on a future date.
Put simply, as a plaintiff in a personal injury case, you have the opportunity to enter into a contract that enables you to sell a portion or all of your settlement proceeds for an immediate lump sum. However, the transaction is not finalized until the case reaches a resolution. As a result, you typically do not need to report the funds received from the sale as income until that point in time.
Settlement Loans
Settlement funding can sometimes come in the form of a loan. Not unlike purchasing agreements, these types of loans provide a means for you to swiftly obtain cash based on the anticipated proceeds of your pending legal settlement. It is important to note that these types of loans often require you to pay back the loan, regardless of the outcome of your case.
To Conclude:
At Fair Legal Funding, we understand that if you’ve been injured in an accident caused by someone else, your focus should be on your recovery. However, financial stress resulting from an inability to work due to your injuries can make the situation even more challenging. This can impact not just you, but your entire family.
Fortunately, there is a solution available. If you have filed a lawsuit against the responsible party, settlement funding from Fair Legal Funding can offer much-needed financial relief while your case is pending. If you qualify, the funds can be used to pay your medical bills or cover everyday expenses. The amount you borrow will be deducted from any settlement or judgment you ultimately receive.
Now that you are aware of the benefits of settlement funding, we encourage you to discuss it with your lawyer. They can help determine if it is the right option for you. Alternatively, you can contact us directly or fill out our online application. Our team of experts is available to provide any support or assistance you may need during this process.
