Pre-Settlement Funding

Pre-settlement funding provides a plaintiff a cash advance against the anticipated future compensation that one is expected to get from a claim. If you're facing challenges covering your living expenses and bills, pre-settlement funding can prove useful. The pre-settlement advance has stark differences with the traditional loan.

What are "Pre-Settlement Advances" And Why Should You Get One?

Pre-settlement funding is not a loan. Instead, you are selling a portion of the expected settlement or court award now, in exchange for a financial advance.
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In previous years, those involved in a lawsuit had no options when it came to financial assistance. Banks and credit unions would not offer loans when the loan applicant had no credit, which was more likely in the case of applicants who have suffered injuries and are unable to meet their financial needs. Today, however, litigants have a better lawsuit funding option: pre-settlement funding.

With pre-settlement funding, a litigation funding company provides a litigant with money upfront in exchange for a portion of their expected settlement proceeds. Once the case is settled or the court awards damages, the company receives its agreed-upon portion of the settlement. 

Pre-settlement funding involves the sale of a portion of the expected settlement or court award now, in exchange for a financial advance. In other words, the pre-settlement funding company is giving the litigant money now, in exchange for being paid after the case is over. How much a person can receive as a pre-settlement advance is typically determined by the expected outcome of their claim. Pre-settlement funding is nonrecourse, meaning that if the person does not win or settle their case favorably, they do not owe any money to the pre-settlement company. If you do not win, you pay nothing. 

If you have filed or are planning to file a lawsuit, you may have to wait years before the case is fully resolved. Litigation can be a significant financial burden, not to mention stressful and time-consuming. While you are waiting for your settlement, you may be accruing medical expenses and daily living expenses. You may also be unable to work, meaning they you are also facing lost wages and may have trouble paying bills while waiting for the case to resolve. With pre-settlement funding, you can have the finances needed for paying:

  • your mortgage or rent 
  • your utility bills 
  • vehicle payments and maintenance 
  • credit card bills 
  • other expenses

Settlement Cases We Fund

Types of Cases We Fund

If you are researching your options for pre-settlement funding, you might be wondering what types of cases qualify. There are many different types of injury cases that qualify for pre-settlement funding. Generally, if you sustained a physical injury that caused damages at the hands of another individual or entity, you likely qualify for pre-settlement funding. Here are several of the most common types of cases we fund.
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Benefits of Receiving Pre-settlement Funding

Until you settle your case, you need to find a way to pay these bills. Pre-settlement funding can help you avoid going into debt (or further into debt) by giving you the money to cover costs until your lawsuit is resolved.
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There are a number of reasons why it’s a good idea to apply for pre-settlement funding. Here is a look at three of the major benefits:

 

1. Pre-Settlement Funding Helps Avoid Debt or Going Further Into Debt

 
Once you file a lawsuit, getting your day in court can take months – or even years. While you are waiting for your case to resolve, you may need money to help cover your daily expenses such as mortgage/rent, utilities, vehicle expenses, and other basic needs. You may also have medical bills or be dealing with lost wages. Until you settle your case, you need to find a way to pay these bills. Pre-settlement funding can help you avoid going into debt (or further into debt) by giving you the money to cover costs until your lawsuit is resolved. 

 

2. You Are Not Pressured To Take The First Settlement Offer

 
Litigation is stressful, time-consuming, and expensive. While you are waiting for your lawsuit to resolve, your bills may be piling up, and you might also be out of work. It might be tempting to accept the other party’s first settlement offer, just to be done with your case and have money to pay your bills. But with pre-settlement funding, individuals do not feel the pressure of cash constraints. They have the money to pay their bills and do not feel obligated to accept a low settlement. They can wait until the other party offers a fair settlement, or until the court awards damages. 

 

3. Pre-Settlement Funding Is A Non-Recourse Cash Advance

 
Pre-settlement funding is a cash advance on the expected settlement of your legal case. With pre-settlement funding, you are selling a portion of the potential proceeds of your lawsuit. The company can only receive the portion they purchased. However, some companies charge compounding interest on the advance. If your case is unsuccessful, you do not have to pay anything back. This is what is known as a non-recourse advance.

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Things You Should Know About Lawsuit Funding

Lawsuit funding may sound like a loan, but it’s technically a non-recourse advance. That means no settlement = no repayment.
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After a personal injury, cash can be tight. You might be struggling to keep up with necessary expenses due to lost wages while your mailbox fills up with medical bills that will soon be due. You’ve hired an attorney but still find yourself in a stressful and overwhelming situation. Other than waiting for the legal process to conclude and your claim to settle, it may seem like there are no financial options. Lawsuit funding can help.

There Are No Restrictions on How You Spend Your Lawsuit Funding


When we purchase a portion of your lawsuit, we won’t dictate how you spend your funds, nor do you need to show us how you spent the money. It’s for your personal use however you see fit. Maybe you need to catch up on your utility bills, rent, car payments, or even tuition. Maybe you borrowed money from a friend or relative, and you want to pay it back sooner rather than later. Perhaps you have medical bills that can’t wait or child support that needs to be paid. The choice is yours alone. 

There Are No Monthly Payments


With personal loans and other lines of credit, you are expected to make monthly payments. If you fall behind more than a month or two, the results can be disastrous for your credit rating and financial life. Lawsuit funding is different. It is not a loan, and you don’t make monthly payments. You only pay us when you receive your settlement or court award. If you do not receive any compensation for your claim, we accept the loss, and you owe us nothing at all.

You Need to Be Represented by an Attorney


To qualify for litigation funding, you do need to be represented by an attorney. To design the best funding plan for you, we work closely with your lawyer. Your lawyer can provide us with necessary information, such as the amount of your expected settlement, what your case might be worth, and when your case might be resolved. We determine if you qualify, the amount for which you are eligible, and other specific details of your settlement funding based on the information your attorney provides.

Many Different Types of Cases Qualify


We fund a variety of different lawsuits, not just those involving personal injury. Get in touch with us to find out if we can help with your type of legal claim. Some of the most common cases that qualify for pre-settlement funding include:

  • Bicycle and pedestrian accidents
  • Nursing home abuse
  • Boating and ATV accidents
  • Motor vehicle accidents
  • Wrongful death
  • Defective products
  • Birth injuries
  • Animal bites
  • Catastrophic injuries
  • Appeals
  • Animal bites
  • Construction site accidents
  • Whistleblowing
  • Employment discrimination

If you have a valid legal claim for which you and your attorney are expecting a settlement, the chances are high that we can help you. All you need to do is reach out.

Your Attorney Takes Care of Ensuring Payment After Your Settlement


You won’t have to worry about the logistics of paying the litigation funding company once your claim is settled. After your attorney receives your settlement monies, they will contact USClaims to find out the exact amount you would need to pay. The attorney then cuts a check from your proceeds in that amount, and you will owe us nothing.

Educational Resources

What Important Questions Should I Ask a Pre-Settlement Funding Company?

Asking for information does not obligate you to apply, sign any paperwork, or agree to work with a specific company.
Questions for Loan Settlement Companies.

While you are researching which pre-settlement funding company is right for you and your financial needs, you will have to dig in and carefully compare your options. Everyone’s situation is different; however, there are a few key questions that you might consider asking the pre-settlement funding companies that you consider doing business with. Remember, asking for information does not obligate you to apply, sign any paperwork, or agree to work with a specific company. Also, if any of the funding companies are hesitant to answer any of these questions, that’s a pretty good indication that it’s time to cross them off your list. Here are a few questions you may consider asking:

Where are you located, and do you cover my state?

 

Check with the pre-settlement funding company to make sure that they able to deal with residents of your state. The company does not need to be located in the same state as you, but they may need to be registered or licensed to provide funding to the residents of a particular state. Additionally, some states regulate litigation funding and impose certain restrictions. 

Are there any application fees or upfront charges?

 

Ask the pre-settlement funding company if there is a fee to submit an application. Some companies do have application fees. Others, such as USClaims will evaluate your application for free. 

Are there any funding fees or interest charges?

 

Some pre-settlement funding companies charge interest on the settlement funds or cash advance – this is sometimes referred to as a “funding fee.” This information may or may not be available on the company’s website. Before you agree to work with a pre-settlement funding company, check to see: 

1) if they charge interest, 
2) how much interest the company will charge each month before you receive your settlement or court award, and 
3) how often the company compounds the interest – companies may compound on a monthly or even weekly basis. 
“Simple” interest means that your interest is based only on the principal, your cash advance. 
“Compounding” interest means that the interest on the cash advance adds up each week or each month, the total due is based on this new, growing amount. 
Knowing whether they charge an interest rate and whether it is simple or compounding can directly impact how much money you owe the pre-settlement funding company once you receive your settlement. 

What paperwork or information will you need from my attorney?


To be eligible for pre-settlement funding, you will need to be represented by a lawyer. This lawyer may have either filed a lawsuit on your behalf or is planning to file a lawsuit in the immediate future. Pre-settlement funding companies will likely ask to speak to your lawyer about your case; the company will value your case based, in part, on this discussion with your attorney. You should ask the pre-settlement funding company about what information your attorney should be prepared to share. This may include (if applicable) police or incident reports, medical reports, photos of the incident or injuries, insurance policy and limits, and other information that may be unique to your lawsuit. 

What if I already have a cash advance from another pre-settlement funding company?

 

If a litigant has previously sold a portion of their proceeds to another funding company, the new funding company will likely require that the previous funding be paid off with the new funding. At time, the amount of the previous funding will prevent future fundings, because the value of the case may not justify additional fundings.  Additionally, some states have laws in place that limit litigants on the total amount of the advances they may receive. If you are close to or have already reached that limit, a second pre-settlement funding company will likely not want to work with you. 

What are the terms and conditions of the pre-settlement funding?

 

No one likes to be surprised by hidden fees or conditions, especially when you’re already dealing with a stressful and time-consuming lawsuit. Before you select a pre-settlement funding company, be sure to ask about all of their terms and conditions related to the cash advance and repayment. If there are any terms or concepts that you do not understand, do not hesitate to ask the pre-settlement company or your attorney to further explain them to you. 

How quickly will I receive my cash advance?

 

Once you have completed your application and have been approved for a cash advance, most reputable pre-settlement funding companies will be able to transfer money to you within one to three business days. 

Is pre-settlement funding non-recourse?

 

Non-recourse funding means that if you do not settle or win your case, then you are not responsible for paying back your cash advance or any amounts to the litigation funding company. You should confirm this with the pre-settlement funding company. You don’t want to be on the hook for repayment as if it were a loan (plus interest, potentially) if your case is unsuccessful or you don’t collect anything.

News and Tips

What Is a Cash Advance on a Pending Lawsuit?

A cash advance is an appealing option to many plaintiffs who need money right away and cannot wait until their lawsuit settles or receives a court award.

A cash advance on a pending lawsuit is not considered a loan or a line of credit. At USClaims, we purchase a portion of the proceeds of your anticipated legal settlement. In exchange for that purchase, we provide you with a cash advance.

Once you receive compensation for your claim, your attorney will take care of the details of repaying your cash advance to us once they receive your settlement funds.  If you end up not receiving compensation after pursuing your claim, USClaims gets nothing; you get to keep your cash advance and do not have to pay USClaims anything.

Should You Get a Cash Advance on Your Pending Lawsuit?

 

Only you and your attorney can decide if a cash advance on a pending lawsuit is right for your situation. There are many benefits to receiving settlement funding. For example, it may buy you more time to work out an acceptable settlement. Many plaintiffs settle their cases far too soon because they are strapped for cash. 

With bill collectors calling and credit scores falling, accident victims don’t always have another option besides settling their claim fast. When a claim needs to be settled quickly, however, it is usually settled for much less than it is worth. Insurance adjusters realize that plaintiffs might be in a hurry to have cash in their hands, and they will take advantage of this fact. With settlement funding, you have the time to negotiate a better settlement and not take the first offer from an insurance company.
A cash advance on a pending lawsuit provides money to pay your expenses during this stressful time. If you have fallen behind on your bills, aren’t sure how you are going to make ends meet and pay your medical expenses, or are borrowing money from family or friends, now is the time to consider an advance on your settlement funds. 

Do You Qualify for a Cash Advance?

 

The best way to determine if you qualify for a cash advance on your settlement is to apply. Unfortunately, not all applicants will be eligible for a cash advance on their lawsuit settlement proceeds. To be eligible, you must have retained an attorney. We will work with your attorney to determine if your lawsuit qualifies. We base our decision on the details of your case, how much your attorney believes your case is worth and will settle for, as well as where you are at in the litigation process.  

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How To Find The Best Pre-settlement Funding Company?

Once you have a list of all the pre-settlement funding companies you’re considering, find out what types of cases they offer pre-funding for and how quickly they can provide you with money.

You’ve familiarized yourself with the process of pre-settlement funding and decided you want to move forward with the process. Now, you just need to know how to find the best lawsuit funding company. As you research your different options, you’ll want to keep some of the different things in mind before you make your decision:

Don’t hesitate to ask questions

 

The term “best” can be subjective; what works well for one plaintiff’s case may not work as well for another. Everyone’s lawsuit and situation are unique, and as such, their needs for a pre-settlement funding company may differ, too. Once you have a list of all the pre-settlement funding companies you’re considering, reach out to them individually and ask several questions to help you narrow down your choices.

 Find out what types of cases they offer pre-funding for, how quickly they can provide you with money, and so on. You’ll also want to find out what their fees are; a reputable and reliable pre-settlement funding company will gladly tell you their lawsuit advance fees with full transparency. If they are too vague or refuse to answer, move on to the next company on your list. 

Read through online review

 

If people have had good experiences with the pre-settlement companies they worked with, you’ll be able to easily read about their experiences online, and vice versa. ConsumerAffairs.com is a good place to begin when it comes to comparing pre-settlement funding companies and reviews; you can also do an online search for the company you’re considering, and read about real customer experiences from various sources. If you’re having a hard time finding reviews for a certain company (or worse, finding negative reviews), it can be a major red flag.

Give yourself plenty of time

 

Compiling a list of pre-settlement companies, researching online reviews, comparing what they offer, and finding out more information from each one can be a time-consuming process. When it comes to finding the best pre-settlement company, it’s important to do your due diligence and not rush into making a decision. 

Completing proper due diligence means starting early on in the lawsuit process, and as soon as an attorney takes on your case. Ideally, you don’t want to wait until you’re potentially strapped for cash and eager for a payout, as you might not do enough research and may ultimately choose a company that’s not best suited for your particular lawsuit. If you start the process early on, you’ll have enough time to do your due diligence and decide what pre-settlement company is best for you. You don’t even have to move forward with a lawsuit advance, but it’s a good idea to know who you will use, just in case. 

Pre-Settlement Funding Common FAQ

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