Because the wheels of justice really do grind slowly, and the cost of lawsuits can undoubtedly take a tremendous financial toll on participants, the amount of strain on an injury victim can become almost unbearable over time. Some individuals must wait years for their lawsuit to either reach a settlement or come to a winning judgment.
All the while, living expenses continue to accrue. Mortgages don’t magically stop requiring payments, and neither do utilities, insurance companies, nor medical bills. An injury victim who has not been able to work can quickly become overwhelmed with mounting financial demands. Here’s where legal funding can be the answer.
The following information will endeavor to explain what pre-settlement funding is as well as how a plaintiff can apply for it. At practically any stage during a personal injury lawsuit, the individual can apply for pre-settlement funding. When an injury victim is represented by a lawyer, an application may be made for legal funding if any of these apply:
- A claim is already filed with the insurer.
- An attorney has submitted the plaintiff’s demand to the insurer.
- Plaintiff’s medical records and bills are available to be evaluated appropriately.
- Plaintiff’s lawsuit is in the pre-litigation stage (no complaint has been filed yet against the insurer)
- Attorney has filed a suit, but it’s in the early steps of discovery and litigation.
- Lawsuit settled before going to trial, but the insurer hasn’t paid on time.
- The case went to trial, and the verdict is in the victim’s favor, but the insurer hasn’t paid the claim yet.
- Property damage repairs are done, and medical treatment is finished, but litigation hasn’t started yet.
Applying for Pre-Settlement Funding
Pre-settlement funding is not a loan. Instead, the procedure is an advance made against the expected proceeds of a legal suit. The following are some points to review when applying for funding:
1. Determine the Type of Funding Needed
Legal funding primarily has two types. There is a slight difference, so understanding them both helps in choosing the one that fits best.
- Litigation Cost Funding – The injured victim may need financial help to cover the expense of a lawsuit. This could include investigators, court reporters, and expert witnesses. Additionally, it could even involve funds to pay attorney fees. The lending company will periodically send a check to the lawyer. The plaintiff agrees with the lender upfront to pay back either a percentage of the lawsuit proceeds/settlement or all advanced funds with interest.
- Direct Plaintiff Funding – The injured victim already has an attorney and has filed the lawsuit. The lending company provides a cash advance enabling payment of the plaintiff’s living costs. Typically, such advances are in the range of $2,000 to $15,000. However, they can be for any amount needed. If the plaintiff wins the lawsuit, the amount borrowed is repaid with the settlement money.
2. Hire an Attorney and File a Lawsuit
A lawsuit must first be filed to receive a pre-settlement advance. A qualified attorney typically has been hired, and a lawsuit is filed in either federal or state court. Often, the lawyer has been hired through a contingency fee agreement whereby the attorney has agreed to accept a percentage of the case’s ultimate verdict or settlement as payment.
3. Analyze the Case’s Strength
Anyone who files a lawsuit does not automatically qualify for legal funding. The lending company analyzes each case’s strength and only gives advance funding when a case appears healthy. These lending companies often have experienced attorneys on staff to evaluate claims. Injury victims should consult with their attorneys concerning their case’s strength before approaching a funding company.
4. Submit Your Pre-Settlement Funding Application
With legal representation acquired, a lawsuit filed, and a strong case verified, a plaintiff is now armed to apply for pre-settlement funding to help pay living costs while the lawsuit meanders through the legal system. The funding company will evaluate the legal claims and assess the approximate amount the plaintiff will receive in a verdict or settlement. This information will help the company decide the amount of money to advance and the amount of interest paid by the plaintiff if the lawsuit succeeds.
5. Review Funding Agreement Proposal With Attorney
When the plaintiff is given documents outlining the terms of a proposed pre-settlement advance, these forms should be carefully reviewed by the plaintiff’s attorney. The lawyer typically accepts responsibility to repay the advance after a case has ended in a successful verdict or settlement. The plaintiff’s final disbursement of funds comes after expenses for court costs, legal representation, and the funding advance have all been paid. In essence, the funding company purchases part of the judgment or settlement and receives repayment at a successful conclusion.
6. Determine if a Pre-Settlement Funding Works Best
Plaintiffs should consider some crucial factors when determining if pre-settlement funding is best for them. Finding out from the attorney how long it could take for a case to reach a verdict or settlement can help figure out how much funding you will need. Plaintiffs may want to consider alternatives such as a low-interest credit card, a personal loan, borrowing from family or friends, or short-term disability. However, if none of these options are feasible, pre-settlement funding may be the answer.
Contact The Legal Funding Group
Any individual injured in an accident is advised to consult with a legal representative. In the process of claiming compensation for damages, if finances become an issue, plaintiffs may want to speak with their lawyer about applying for pre-settlement funding from The Legal Funding Group to help alleviate financial stress and cover household expenses.
Apply today with our quick and easy online legal funding application form.