Pre-Settlement Funding
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Pre-settlement funding, sometimes referred to as a lawsuit loan or legal funding, is a cash advance against your expected compensation from a legal claim. You can use the funds to cover medical costs, everyday bills, and other essential expenses while you wait for your attorney to fight for a fair settlement.
The benefits of getting pre-settlement funding from USClaims include:
- You can receive funding in as little as 24 hours* after approval.
- You don’t need a credit check.
- You’ll never owe more than twice the amount advanced, no matter how long your case lasts**.
Plus, you only repay the funds if your case is successful. No recovery, no repayment.
Apply for a lawsuit loan today or read on to learn more about pre-settlement funding.
Key Takeaways
- Pre-settlement funding is an advance of your expected compensation upon winning a lawsuit.
- You can use the cash to cover medical costs, household bills, or other expenses while you wait for your case to settle.
- Generally, requests for pre-settlement funding need to be approved by an attorney.
- Your settlement advance eligibility and amount depend on the details of your case and your jurisdiction.
- You don’t have to make monthly payments while your case is in progress, and you don’t have to pay at all if you lose your case.
What Is Pre-Settlement Legal Funding?
Pre-settlement legal funding is a cash advance given to a plaintiff who’s waiting for their lawsuit to settle. You may also hear it referred to as a “lawsuit loan,” but in reality, it is not a loan. Unlike traditional loans, pre-settlement funding only requires you to pay the money back if you win your case.
Previously, if you were involved in a lawsuit, there was a good chance you’d be in financial trouble. If you were injured, unable to work, and had little savings, the bills would pile up because banks would be unwilling to issue you a loan. On top of being stressful and time-consuming, cases that dragged on for years could jeopardize a plaintiff’s home, car, and everything you’d worked so hard to earn.
Fortunately, you now have financial assistance available. With pre-settlement funding, you sell a portion of your expected settlement or court award now, in exchange for a financial advance against your future case settlement.
You can use your advance to cover:
- Mortgage or rent
- Utility bills
- Vehicle payments and maintenance
- Credit card bills
- Child support payments
- Medical bills
- Other expenses
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.
The amount you’ll receive varies based on the circumstances of your case. However, borrowers can typically expect an advance of 10% to 20% of your anticipated settlement.
How Pre-Settlement Funding Works
If you’re interested in getting a settlement advance through us, you’ll need to work with an attorney. Once you and your attorney have established an anticipated settlement amount, the pre-settlement funding process typically works like this:
- Apply for funding in less than 3 minutes. We will work with your lawyer to determine your eligibility and design the best funding plan for you based on the amount of your expected settlement, what your case might be worth, and when your case might be resolved.
- Once you’re approved, wait for your claim to settle. You don’t need to make monthly payments during this time, but interest will accrue up to the 2X CAP limit**.
- If your case is successful, we will work with your attorney to gather repayment from the settlement proceeds. If you lose your case, you don’t owe USClaims anything.
Let’s look at a hypothetical example of the process in action. Say your neighbor’s dog attacks you. Your injuries are so severe that you are hospitalized for three weeks and unable to work for several months.
You know your savings wouldn’t last long, so you hire an attorney who’s willing to work with a trusted pre-settlement funding company, like USClaims. Your attorney determines that you should settle your case for $500,000 based on your medical bills, pain and suffering, and lost wages.
After contacting USClaims, we determine that you are eligible for a pre-funding settlement of $50,000 (10% of your expected settlement). Your attorney approves, and you use the money to pay for your medical bills and groceries while you wait for your case to settle.
One year later, you win your case. At this point, your attorney will repay the amount borrowed to USClaims out of your award settlement, plus the interest accrued during this period. In a scenario where you lose your case, you owe USClaims nothing.
Benefits of Pre-Settlement Funding
There are several reasons why it’s a good idea to apply for a settlement advance. Here is a look at three of the major benefits:
Helps You Avoid 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 or 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. A lawsuit loan can help you avoid going into debt (or further into debt) by giving you the money to cover costs until your case is resolved.
No Pressure to Take the First Offer
Litigation is stressful, time-consuming, and expensive. While you are waiting for your lawsuit to resolve, your bills may pile up, and you might also be out of work. You may be tempted 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, you won’t feel the pressure of cash constraints. You have the money to pay your bills and do not feel obligated to accept a low settlement. You can wait until the other party offers a fair settlement, or until the court awards damages.
No Risk If You Lose Your Case
Pre-settlement funding is a no-risk way to stay financially afloat while you wait for your case to be decided. Known as a non-recourse advance, you only need to repay us if you win.
Plus, our service is cost-effective. Some companies charge compounding interest on their lawsuit loans. We don’t. We charge simple interest, and your rate will never change.
Choosing a Pre-Settlement Funding Company
Not all pre-settlement funding companies operate with your best interest in mind.
When exploring pre-settlement funding options, selecting a provider that is a member of the American Legal Finance Association (ALFA) can help ensure your funding is handled according to the highest ethical standards. This includes:
- Transparent contracts and fee structures
- Non-compounded rates
- Rate caps
- No hidden fees
Since 1996, USClaims has been dedicated to providing ethical funding to plaintiffs with our 100% risk-free, non-recourse funding and industry-leading 2X** CAP, which ensures borrowers will never owe more than twice their advance. We will work closely with your attorney throughout the process to provide the financial support you need while they pursue a fair settlement.
Types of Lawsuits We Fund
You may be eligible for pre-settlement funding if you’ve been the victim of a personal injury or another incident that caused you harm or damages at the hands of another individual or entity.
Where USClaims Provides Funding
We’re proud to offer services in most states. However, since laws differ from state to state, we’re currently unable to serve customers in Arkansas, Kentucky, Maryland, Montana, Washington, D.C., and West Virginia.
See How Pre-Settlement Funding Has Helped People Like You
with USC in the past. USC does not control the content of such reviews.
Think You Have a Case?
Call us toll-free at (877) USClaims to speak with a friendly funding specialist today.
Pre-Settlement Funding FAQs
Do I need a lawyer?
Our legal system does not require personal injury plaintiffs to be represented by a lawyer. However, if you want to be sure that you get the compensation to which you are entitled under the law, it’s in your best interest to retain an attorney. Generally, you will need a lawyer’s approval to pursue pre-settlement funding.
How much can I borrow?
Every settlement case is different. We evaluate each case individually to determine if you qualify for a lawsuit loan and, if so, how much you qualify for. We require our applicants to have the representation of an attorney who is working on their case on a contingency fee basis. By contacting your attorney, we can learn a lot about your case that will help our underwriters determine how much funding you qualify for.
What kinds of cases qualify for pre-settlement funding?
Although many of the clients we serve are personal injury plaintiffs, we can provide a cash advance on many different types of legal matters. If you have any of the following types of pending legal issues, we encourage you to apply for funding:
- Medical malpractice claims
- Premises and slip and fall claims
- Worker-related matters
- Qui tam or whistleblower lawsuits
- Employment discrimination
- Railroad employees and Federal Employers’ Liability Act (FELA) claims
- Auto accidents
- Animal bites
- And many more
Does being bankrupt affect my eligibility for pre-settlement funding?
Anyone in an active bankruptcy must disclose if they were involved in a personal injury claim stemming from an incident that occurred before the date of their bankruptcy filing, as well as how much they anticipate receiving from the claim. If they do not disclose this information, it may be considered bankruptcy fraud and can be prosecuted as such.
Are pre-settlement funds loans?
Pre-settlement funding is similar to a loan because it accrues interest and requires you to sign documents agreeing to the terms. It’s also sometimes referred to as a “lawsuit loan.” However, pre-settlement funding is different from traditional loans in that:
- You do not make monthly or routine payments.
It is paid in full when you receive your compensation. - If you end up not receiving compensation, you do not have to pay the funding back or any interest or fees.
- Your approval does not depend on how much you earn or your credit history.
- You need to be represented by an attorney.
- You must have a valid legal claim.
What can I use my settlement funding for?
We don’t restrict how you spend your funding. The money is rightfully yours to do what you want with it, and your plan for using it will not change your approval or the terms of your funding. As such, we will not ask you for any documentation, receipts, or bank statements to prove how the money was spent.
Do I have to pay a deposit?
At USClaims, we purchase a specified amount of your anticipated lawsuit settlement. In exchange, we give you cash to help with your bills now. This is a cash advance on the settlement or court award you will receive. As such, no deposit is needed.
How do interest work in pre-settlement loans?
We will inform you of the interest rate and how the interest is calculated for your funding. There are no hidden fees. You have nothing to track, and your interest rate or its calculations won’t change over time.
However, the longer the funding is outstanding, the more interest will accrue. Once you receive a settlement or court award, your attorney will contact us to determine the total amount, including any interest and fees currently due on your pre-settlement loan. After receiving the monies for your compensation, your attorney will send us a check for the determined amount.
How quickly can pre-settlement funds become available?
We understand what it’s like to be in your position and work quickly to provide the funds you need. Once your application is approved, you can receive your pre-settlement loan within 24 hours*. We generally send the money directly to your attorney, and your attorney’s firm then distributes it to you.
Can you get pre-settlement funding without lawyer consent?
Lawyers are essential to obtaining pre-settlement funding. Your lawyer will share important information about your case with us. If your case is strong, has a reasonable time frame, and the expected award falls within our guidelines, your probability of being approved is high.
During pre-settlement funding, a lawyer’s role isn’t just to provide information; they are also responsible for actively litigating the case on your behalf toward a successful resolution. Once the case settles, your lawyer will receive the settlement funds first. Then, they’ll use the proceeds to repay us before disbursing the remaining cash to you.
It is your lawyer’s duty to protect your interests and the rights of third parties to the settlement proceeds. This means you can’t get pre-settlement funding without a lawyer’s consent.
What should I look for in a pre-settlement funding provider?
When choosing a pre-settlement funding provider, look for a company that issues funds quickly upon application approval, charges fair and transparent interest and fees, and has been operating successfully for many years. You should also check out reviews from satisfied customers.
Disclaimer: Throughout this website, the term “loan” may be used for convenience to describe pre-settlement funding. However, such transactions are not loans in the legal sense. Repayment is strictly contingent upon the successful resolution of your case. If your case is unsuccessful, no repayment is required. Common terms like “lawsuit loan” are used colloquially but misrepresent the non-recourse nature of pre-settlement funding.
