How Do You Qualify For Pre-Settlement Funding

How Do You Qualify for Pre-Settlement Funding?

If you have an auto accident or have another type of personal injury claim, you should get the compensation you deserve, but litigation takes time.

Pre-settlement funding, commonly referred to as lawsuit loans or litigation financing, allows you to obtain a cash advance against a future settlement.

How do you qualify for pre-settlement funding, then?

Despite the name, a lawsuit loan is not a traditional loan but rather a cash advance. This cash advance is non-recourse, meaning you will repay nothing unless you win your case.

The nature of this non-recourse funding means that lenders will not consult your credit score, and they will not perform a credit check. You will not be asked to provide proof of income or verification of employment status either.

Instead, your application for pre-settlement funding will be evaluated by underwriters on the merits and potential value of your case. This assessment is made based on the documentation requested from your attorney.

While non-recourse funding extends you funds now with no risk – you repay nothing if you lose your case – this means lenders are taking on considerable risk when offering cash advances.

To mitigate this risk, funding companies will insist your case is represented by an attorney. Lenders also favor giving funds to plaintiffs close to a judgment or settlement agreement.

Assuming your case has a strong potential for success, how do you qualify for a pre-settlement loan?

You must have sustained significant damages

Damages refers to the amount of money the law awards you for a breach of duty or a violation of some right. Compensatory damages are intended to compensate you for injury or loss.

Personal injury cases that qualify for settlement funding include:

  • Road traffic accidents
  • Accidents in public places
  • Accidents at work
  • Medical negligence
  • Police brutality
  • Civil rights claims
  • Employment claims
  • Most types of personal injury claims

Regardless of how the accident occurred, you must have sustained some significant damages as a result of your injuries.

Fortunately, the law is typically good at compensating you for money lost due to injuries. This usually takes the form of lost earnings, as well as money spent on medical equipment, treatment, medications, and other expenses stemming from your injuries.

The compensation you receive for the injury or accident and the consequences is called PSLA (pain, suffering, and loss of amenity).

For a funding company to consider offering you a cash advance against a pending lawsuit, you must have sustained substantial damages.

Beyond this, the defendant must be clearly responsible for these damages, with the outcome of the case looking assured.

The defendant is demonstrably responsible for these damages

In many accidents when the cause is obvious, liability is settled between the two parties at an early stage of litigation. If you are looking for a settlement loan to defray costs now, you must be able to show that the defendant was clearly responsible for your injuries.

Other cases involve the defendant accepting that they are primarily liable, while contending that the plaintiff contributed in some way to his injuries and subsequent financial losses. This situation frequently unfolds in both road traffic accidents and workplace injury claims. So, if you were driving too quickly or you took risks at work you knew were dangerous, this may weaken your case when applying for lawsuit financing.

The defendant needs the financial means to pay any legal settlement

To qualify for pre-settlement funding, the defendant must be able to pay any potential damages. The funding company needs to be confident they will recoup their investment.

Now, the person defending a claim is seldom the person who caused the injury. Almost always, the person you will claim against is insured, meaning the defense will be conducted by the insurance company, even if the person or organization responsible for the injury is named in court documentation as the defendant.

Make sure the person you are claiming against is insured and in a position to pay damages and you should be in a strong position when it comes to obtaining legal funding.

Personal injury lawsuits are time-consuming and stressful. At the same time as potentially losing income, you are also liable to be confronted with mounting medical bills, as well as all life’s everyday expenses.

With a lawsuit cash advance, you could use the money for any purpose, including:

  • Rent
  • Mortgage
  • Medical bills
  • Prescription medications
  • Rehab costs
  • Loan payments
  • Groceries
  • Utilities
  • Auto expenses
  • Tuition
  • Routine expenses

Perhaps the most valuable benefit of litigation cash advances is the time it gives you to pursue the compensation you deserve instead of being pressured to accept a lower settlement and weakening due to financial strain.


Jared Stern
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