Pre-settlement funding seems to be a fancy word, but it is beneficial once you understand it completely.
It is advantageous to a person who is unfortunately involved in a lawsuit and needs financial help.
Gone are the days when someone entangled in a law battle could not get any substantial financial assistance due to the apprehensions in the market. Also, the banks and credit firms would not give loans to such a person as they did not have any credit score.
However, the concept of pre-settlement funding has come as a massive blessing for such people. According to the idea, the person involved in a lawsuit and seeking money is given money by a litigation funding firm. The firm provides this money to the litigant in exchange for a specific part of the expected lawsuit settlement returns.
Though this seems to be an easy process, many legal complexities are involved. This money is not a loan, as the litigant does not have to pay back the money if, unfortunately, he loses the case.
So, to understand the process better and get proper assistance, it is best to consult an excellent pre-settlement funding firm, such as Prime Case Pre-Settlement Funding.
Table of Contents
Guide To Benefits of Pre-Settlement Funding
Why should you go for pre-settlement funding, and what are its benefits? Let us walk through six of the significant advantages of pre-settlement financing of a litigant.
Financial Assistance in the Need of Hour
A significant benefit of pre-settlement funding is that the litigant gets money when he needs it the most. A case of settlement implies that the litigant is fighting a court case where he is expecting compensation for some wrongdoing, for example, in an accident.
These cases can go on for many years and require the litigant to incur substantial financial losses. In some situations, due to the injuries in the accident, the litigant may not be able to work for some time and can face financial crunches.
This is when pre-settlement funding comes into the picture, and the plaintiff can get fast money for their assistance.
Helps in Safeguarding Your Savings
It is said that once you get involved in a case, you should get ready to face a substantial financial burden. The issues may be long, and you may need more money. When you encounter an economic crunch, your next resort is to depend on your credit cards and savings accounts.
However, no matter how much savings you have, usually, when it comes to fighting cases, they are sure to get replenished. But, when you take pre-settlement funding, there is no need to rely on your savings, and you can consider preserving them for later use.
Financial Stability Prevents Desperate Decisions
This is a typical scenario in court cases related to compensation, in which the plaintiff gets desperate by the end of the case. Due to financial issues and instability, they may make a desperate decision to accept a low compensation.
However, when you have the backing of pre-settlement funding, you can take a low compensation to meet your ends. Also, financial security implies you can fight well for a hefty and rightful compensation.
No Cost For Applying
The best aspect of pre-settlement funding is that you need not have any advance money to apply. It is a free-of-cost application with no up-front costs, as many funding firms promote.
So, you don't need to worry about paying a hefty fee just for applying for the process. However, be cautious about any underlying or hidden fees or high interest rates levied by the firms.
Immense Protection From Creditors
Another benefit of going for pre-settlement funding is that it offers immense protection from creditors. Imagine the horrors of creditors waiting for you at your doorstep just because you are unable to pay your bills.
However, when you get enough money to pay for your financial responsibilities, you need to worry about being defaulters and people coming after you to take their money.
No Need To Take Care of Credit Score
Usually, when you are seeking a loan, you need your credit score to get through the loan process. If you have a good credit score, you can quickly get the loan, but it may pose a problem if the credit scores need to improve.
However, in the case of pre-settlement funding, there is no need to pay attention to your credit score. No checks on your credit history are made, no matter how many loans you have taken.
Finding yourself in a lawsuit may pose a tremendous financial burden with no one to help. However, pre-settlement funding can come in handy at this point and can help you deal with your financial losses while you are fighting the case. I just want to let you know that you still need help from a reputable funding firm that can quickly get you through the process. Happy funding!
Frequently Asked Questions
What is pre-settlement funding?
Pre-settlement funding is a financial option available to individuals involved in a lawsuit, providing them with funds in anticipation of a future settlement or judgment.
How does pre-settlement funding differ from a loan?
Unlike a loan, pre-settlement funding is non-recourse, meaning the borrower is not obligated to repay the funds if the lawsuit does not result in a favorable outcome.
Who is eligible for pre-settlement funding?
Individuals in a legal proceeding awaiting a settlement or judgment may be eligible for pre-settlement funding.
Are there any upfront costs or fees for applying for pre-settlement funding?
There are typically no upfront costs or fees when applying for pre-settlement funding.
Does my credit score affect my eligibility for pre-settlement funding?
No, your credit score does not impact your eligibility for pre-settlement funding, as the budget is based on the merits of your case.
How quickly can I receive funds after applying for pre-settlement funding?
The time frame can vary, but many applicants receive pre-settlement funding within a few days to a week after approval.
Can pre-settlement funding be used for any expenses?
Yes, pre-settlement funding can be used for personal expenses, including living costs, medical bills, and legal fees.
Is there a limit to how much pre-settlement funding I can receive?
The amount of funding you can receive depends on the specifics of your case and the estimated settlement amount.
How is the amount of pre-settlement funding determined?
The amount is typically based on a percentage of your lawsuit's anticipated settlement or judgment amount.
Do I need my lawyer's approval to apply for pre-settlement funding?
Yes, most pre-settlement funding companies require your lawyer's cooperation and approval as part of the application process.
What happens if I lose my case after receiving pre-settlement funding?
If you lose your case, you are generally not required to repay the pre-settlement funding, as it is a non-recourse funding option.
Can I apply for pre-settlement funding more than once during my case?
Yes, depending on the circumstances of your case, you can apply for additional funding.
How does pre-settlement funding affect my final settlement?
Pre-settlement funding and any associated fees and interest are typically deducted from the final settlement amount.
What types of cases are eligible for pre-settlement funding?
Most civil cases, including personal injury, workers' compensation, and wrongful death, are eligible for pre-settlement funding.
Is pre-settlement funding regulated?
Yes, pre-settlement funding is regulated, but the regulations vary by state, so it's essential to understand the rules applicable in your jurisdiction.
Can I negotiate the terms of my pre-settlement funding agreement?
You and your attorney can review and negotiate the terms of the funding agreement to ensure they are fair and reasonable.
What information do I need to provide for a pre-settlement funding application?
Please provide details about your case, including the type of case, your legal representation, and the expected settlement amount.
How does my attorney get involved in the pre-settlement funding process?
Your attorney will need to provide information about your case and may need to acknowledge the funding agreement.
Are there any risks associated with pre-settlement funding?
The main risk is the potential for high fees and interest rates, so it's essential to understand the terms of your agreement.
Can pre-settlement funding impact the outcome of my case?
Pre-settlement funding does not impact your case's legal process or outcome; it simply provides financial relief during the litigation process.