If you have a forthcoming settlement from a personal injury claim, you may have considered pre-settlement funding.
Many people needing an injection of funds to defray expenses and medical bills may wonder whether a lawyer can prevent you from obtaining pre-settlement loans.
Fortunately, your attorney cannot deny you the option of pre-settlement funding in the form of a cash advance against your settlement. That said, you should bear the following pointers in mind:
- You must have legal representation to qualify for pre-settlement funding
- Your attorney will be informed that you are seeking a lawsuit loan so they can collaborate with the lending company on your behalf to determine the strength of your case
- Be prepared for your lawyer potentially advising you not to pursue lawsuit funding if they feel this is not in your best interest
- Pre-settlement funding can help some people to meet crucial expenses at a difficult time, but lawsuit funding is not the right solution for everyone
- Ultimately, the decision to obtain a pre-settlement cash advance is yours
Do I Need an Attorney to Qualify for a Pre-Settlement Loan?
You must have an attorney representing your settlement case before you can proceed with a pre-settlement loan. This will also significantly increase your chances of winning a settlement.
The reason for this requirement is that the non-recourse nature of lawsuit funding means repayment hinges on the outcome of the case. For lenders, the risk of offering a cash advance to plaintiffs without legal representation is too great.
Fortunately, many law firms will work on a contingency fee basis, with no fees payable if you lose your case. Retaining a lawyer might cost you around 30% of your settlement, but with the right legal representation, you should obtain a substantially larger settlement.
Only You Can Decide if Pre-Settlement Funding is Right for You
If you decide that a lawsuit loan is right for you, you will not be prevented from pursuing this avenue of funding. You should, however, listen closely to the advice of your attorney.
Perhaps you discover that your lawyer is attempting to prevent you from obtaining a lawsuit loan. If so, you should speak with them to determine why. Sometimes, it may simply be that your state of residence doesn’t permit lawsuit funding, or you may already be overextended financially with funding from other lenders.
Luckily, most law firms will understand the challenges faced by those waiting for personal injury settlements to resolve while faced with spiraling expenses and medical bills. With lawsuit funding, you and your attorney will get the breathing space you need to negotiate the best possible settlement.
Ethical guidelines prevent your attorney from directly loaning you cash for personal expenses. They can, though, sometimes advance funds to cover costs linked directly to your case – expert witness testimony or legal fees, for instance.
Personal injury lawyers are well-versed with pre-settlement lenders. They are also aware that this non-recourse funding can be a lifeline for some clients in need and with nowhere else to turn.
Were You Denied for Lawsuit Funding? What’s Next Steps?
Even if a lender denies your application for a lawsuit loan, this does not disqualify you from later applying for funding. You may find your case strengthens, or you could find your case moves closer to trial.
Consider asking the lender why they rejected your application. This can help you to strengthen your case for further applications.