Pre-Settlement Funding includes car accident loans and personal injury loans among others. This means a company offers you with needed money today against a portion of your future settlement proceeds
Conducting a civil lawsuit is a long and tedious process that can take months or years to make a decision. While waiting for the pending case to progress, it is certain that billing and living expenses will rise quickly. Even if you are sure that you can get the payment you want, the time between the two will put a heavy burden on your bank account. While lawyers are not able to give out loans to their clients, there are certain companies that can extend what’s called pre-settlement funding to help you get by while waiting for payment.
Although it can be called a “litigation loan” or “settlement loan”, the pre-settlement funds are not loans. Instead, it is considered a non-recourse advance payment, because if you lose the case, you are not responsible for repaying the money. This is the risk that funding providers will have to face when entering into this type of commitment. Most of the cases being granted these types of funding include car accident loans and personal injury loans, although there is a consideration in other types of legal civil cases depending on the circumstance.
To apply for a settlement loan, you must submit an application after filing a qualifying lawsuit. The litigation lender will assess your case, assess the likelihood of winning a lawsuit or settlement, and estimate the amount you can receive. This information can help you get a cash advance. Also, if your payment fee is less than the amount you have agreed to repay (principal, interest, and expenses), the lender will not charge you the difference. You can only claim the remaining money after paying other priority fees (lawyer fees and court fees).
The most obvious advantage of Pre-Settlement Funding can offer necessary breathing space if you are struggling to cope with living expenses, home loan payments, car loan obligations, and medical expenses within your litigation. This type of loan can reduce your financial stress. Another advantage of this type of loan is that you are not required to pay if you lose the case.
While Pre-Settlement Funding can help you get by while pursuing the case, the loan could be very expensive. At the time you pay the lending company from the profits of your settlement, you are going to repay the principal borrowed and the funding fee which could be sometimes three times the amount of what you originally borrowed. Take note though that you are not obliged to pay more than what your settlement is.