Can You Borrow Money Against a Lawsuit?

Getting a Lawsuit Loan: Is It Possible?

Asking “Can you borrow money against a lawsuit?” is common among people involved in ongoing legal battles. The short answer is yes: it’s possible to get a loan tied to the potential outcome of a lawsuit. This is known as a lawsuit loan or settlement funding.

Settlement funding offers financial help to plaintiffs struggling financially due to a drawn-out lawsuit. This type of loan is primarily based on the expected settlement amount. If your case qualifies for legal funding, a lender will provide you with a cash advance against your pending settlement. Remember that, though often referred to as a loan, legal funding is non-recourse. You will only need to repay the funding company if you win your claim.

Finding a trustworthy legal funding company is vital to this process. Uplift Legal Funding offers competitive rates and is dedicated to providing a transparent and smooth borrowing experience. We aim to educate our clients about all aspects of lawsuit loans because making informed decisions is crucial when dealing with financial matters linked to your legal case.

Is It Possible to Borrow Money from a Lawsuit?

If you have a strong personal injury case and legal representation, you can borrow money against your lawsuit.

To borrow against a lawsuit, you take out a risk-free cash advance. The advance is repayable from your settlement. If you do not win your case, you repay nothing.

Do only personal injury cases qualify for pre-settlement funding, then?

What Types of Lawsuits Qualify for Settlement Funding?

You will find that most legal funding companies provide lawsuit loans for a wide range of personal injury lawsuits, employment disputes, civil rights claims, product liability claims, and corporate litigation.

All of these cases take time to resolve, leaving many plaintiffs suffering financial duress.

The most common types of funding we provide are:

• Car accident pre-settlement loans
• Commercial vehicle accident funding
• Medical malpractice lawsuit funding
• Premises liability and slip and fall funding
• Whistleblower lawsuit funding
• Nursing home negligence loans
• Wrongful death lawsuit loans
• Other personal injury lawsuit loans

Ask Yourself How Much Money You Really Require Before Committing to a Lawsuit Loan

Before you approach legal funding companies for a cash advance against your anticipated settlement, consider how much you really need to borrow.

Many people exploring lawsuit loans need to pay overdue bills, while others require cash to stave off eviction proceedings. In these scenarios, when you have a fixed sum in mind for truly pressing matters, legal funding is often an efficient solution.

Avoid the temptation to inflate the amount you are borrowing to accommodate needless impulse purchases. Focus on need rather than want when considering borrowing against a lawsuit.

Legal funding companies will typically set borrowing limits, both minimum and maximum. The amount you can borrow within these parameters depends on the strength of your case and the expected value of your settlement.

You can borrow up to 20% of your claim’s total value, but this doesn’t necessarily mean you should borrow that amount.

Most legal funding organizations will offer you a cash advance between 10% and 20% of your anticipated settlement value. Additionally, the value of a personal injury claim is contingent on many variables, including the scope and severity of injuries and any relevant insurance coverage.

The most common reasons plaintiffs borrow money against a pending lawsuit include:

• Rent payments
• Mortgage payments
• Tuition fees
• Medical bills
• Utility bills
• Eviction prevention
• Transportation
• Family costs

Pre-settlement funding can provide funds in as little as 24 hours once we receive your case documents from your attorney. This helps you meet your financial obligations while you are waiting for a personal injury settlement. You won’t have to make monthly payments, and if your case does not settle, you will repay nothing.

How Can You Borrow Money Against a Lawsuit?

Regardless of the legal funding company you approach, the steps required to get a lawsuit loan will be broadly similar. The process is straightforward and proceeds as follows:

1. Start your lawsuit loan application online or over the phone. You must provide the basic details of your claim and the contact details of your attorney—you need legal representation to qualify for pre-settlement funding.
2. The legal funding company then liaises with your legal counsel, requests your case file, and reviews your case.
3. Underwriters from the funding company will typically evaluate cases in as little as 48 hours.
4. If your application is successful, you can expect a funding agreement to be sent to your lawyer.
5. Assuming the offer is acceptable, you sign and return the funding contract.
6. You receive your lawsuit cash advance either through direct deposit or by check.

What Fees Are Associated with Lawsuit Loans?

Reputable legal funding companies will not ask you to pay upfront fees. This type of non-recourse financing should not incur fees since you are taking a cash advance rather than a loan.

Processing fees, also called application fees, take the form of a one-time charge the lender subtracts from the final borrowed amount. This charge is intended to cover underwriting costs.

You will find that most legal funding companies that charge no funding fees also charge very high interest rates—80% or more annually.

Funding companies charging fees of 5% to 15%, by contrast, usually offer simple, non-compounding interest of 3% monthly, which is much more cost-effective for you.

You should avoid lenders charging a compounding interest rate. The length of time it takes for personal injury cases to settle means you could repay double the amount you borrowed, or more, with compound interest.

How Long Will You Have to Repay the Cash Advance?

There is no fixed timeline for repaying loans against personal injury settlements. When a funding company purchases a portion of an expected settlement, repayment is contingent on the case settling in your favor.

This means there is no risk for you as the borrower.

What Happens If You Lose Your Case or Settle for Less Than Expected?

The non-recourse nature of pre-settlement funding means you are not legally obligated to repay the advance unless you win your case. Similarly, if you settle for less than you expected, you will not be required to repay more than the value of your settlement.

Is Legal Funding the Right Solution for You?

Pre-settlement funding can prove an effective alternative to traditional bank loans, payday loans, or title loans. As with any financial product, though, a lawsuit loan is most beneficial in the long term if you use the borrowed funds wisely.

If you need cash now and you’re waiting for a lawsuit to settle, we can help you leverage some of your settlement at Uplift Legal Funding.