How To Get Your Settlement Money Early

Steps to Access Settlement Money Prior to Resolution

If you’re awaiting a payout from a legal settlement, you might be wondering how to get your money earlier. The waiting period can be stressful as bills and expenses pile up. Uplift Legal Funding provides a workable solution for you.

We provide pre-settlement funding, which is essentially a cash advance on your upcoming settlement. If your case qualifies, you can get cash as soon as the same day to cover living costs, medical bills, or any other expenses while your case is being settled.

Here’s how it works: Once your application is approved, we will send the cash directly to you. There are no monthly payments or upfront fees. You repay the funds only if and when you win your case. In brief, it provides financial relief when you need it most, yet reduces your risk of falling into debt.

How Can You Access Your Settlement Funds Early?

The easiest way to get your settlement money early goes by many names: lawsuit loans, lawsuit cash advances, pre-settlement funding, and litigation financing, among others. A legal funding company extends you a cash advance against your anticipated settlement, and in return, you repay the principal plus interest and an origination fee.

Why Do Plaintiffs Need to Access Settlement Funds Early?

The American Bar Association (ABA) reports that personal injury lawsuits typically take from 3 to 24 months to resolve.

In a car accident, for instance, you are likely to sustain injuries that may require treatment and possibly even surgery. At the same time, you could lose wages as you take time off work for therapy and rehabilitation.

With mounting bills and medical expenses, and the full expectation of receiving a settlement for your losses, damages, injuries, and emotional pain and suffering, it is understandable to explore your options for leveraging that settlement now.

If you are under acute financial stress, you could easily be pressured by the insurance claims adjuster, possibly even accepting a lowball initial settlement offer rather than pursuing the compensation you deserve.

Pre-settlement funding, also known as lawsuit loans, is one of the most common financial products plaintiffs use when looking to access their settlement money early. What are lawsuit loans, then?

What Is Pre-Settlement Funding?

A lawsuit loan is not actually a loan, but rather a non-recourse cash advance. This means it is risk-free for the consumer.

A legal funding company will advance you a portion of your expected settlement – from 10% to 20% of the expected value. If you win your case, you repay the principal in addition to an origination fee and interest. Your attorney pays the funding company from your final settlement.

If you lose your case, you are not obligated to repay the cash advance.

A lawsuit loan is not the right solution for everyone, and it’s not the only solution if you want your settlement money early. Today’s guide will help you determine whether pre-settlement funding makes sense for you.

How Pre-Settlement Funding Can Help

If you file a personal injury claim for an auto accident, product liability, or medical malpractice, litigation can take months, or sometimes even years if your case goes to trial.

With costs rising and income potentially affected, many people in these situations find that a lawsuit loan is a more effective resolution to short-term cash flow issues than taking out a traditional bank loan or paying out of pocket from savings. Because there is no credit check and no need to prove your income or employment status, all that counts when applying for a lawsuit loan is that you have legal representation and a strong claim.

You can use the funds for any purpose.

As we will outline below, there are some drawbacks to lawsuit loans as well as many benefits. Only you and your attorney can decide whether the positives outweigh the negatives and whether pre-settlement funding is the right choice for you.

How Pre-Settlement Funding Works

First, you apply to a legal funding company, either online or over the phone. You will need to provide the following:

• Contact details for your attorney
• The basic facts of your case

A reputable legal funding company should promptly evaluate your claim by consulting with your lawyer. After assessing the strength of your claim and the value of the expected settlement, the lender will send a funding agreement to your attorney.

This agreement is a non-recourse contract, meaning you agree to pay a portion of your future settlement to the lender only if you win your case.

The non-recourse nature of this financing means the lender shoulders significant risk. For this reason, you cannot get pre-settlement funding unless you have a lawyer handling your claim. Additionally, the legal funding company must be confident you will win your case and reach a satisfactory settlement.

You may need to approach several legal funding companies before you find one offering rates and fees that align with your needs and budget.

What Is a Non-Recourse Financial Product?

A non-recourse financial product involves the lender assuming all the risk. As the consumer, you pay for the service through fees and interest rates.

Unlike a traditional loan, a lawsuit loan is only repayable if you win your case and receive a personal injury settlement. If your case settles, your attorney repays the legal funding company the principal, interest, and funding fee in full from your final settlement. There are no monthly payments, as with traditional loans.

When applying for legal funding, your creditworthiness, employment status, and income are not considered. Instead, the success of your application is predicated on the strength of your claim and legal representation. Legal funding does not impact consumer credit ratings in any way.

Usury laws—state laws limiting interest—do not apply to legal funding. Lawsuit cash advances are non-recourse financial products, as outlined above, and not loans. This means you should look closely at the interest rates and costs of lawsuit loans before signing an agreement.

What Costs are Involved with Lawsuit Loans?

If you win your personal injury case, you agree to pay the principal amount you borrowed against your lawsuit, in addition to interest and a funding fee, also known as an origination fee.

Watch out for legal funding companies that charge compound interest. You could end up paying an APR of 60% or more. If your case takes some time to resolve, you could pay back more than double the amount you borrowed.

Many legal funding companies charge slightly higher funding fees but much lower rates of simple, non-compounding interest. These fees are not payable out of pocket, but rather from your final settlement. This often proves to be a much cheaper way of borrowing.

The funding fee for legal cash advances typically runs from 2% to 4% monthly. This might initially sound reasonable, but it represents an annual percentage rate of up to 60%.

When you receive your settlement check, your attorney deposits it into the law firm’s trust account or escrow account. Once the check clears the issuing bank, your attorney makes the following deductions:

• Lawyer’s fees
• Legal expenses
• Medical liens

Your attorney then repays the legal funding company before sending you the remainder, minus any other relevant costs, either by direct deposit or check.

The Pros and Cons of Pre-Settlement Funding

Like all financial products, pre-settlement funding comes with its benefits and drawbacks. Everyone is different, and financial circumstances vary, so all that counts is whether a lawsuit loan makes sense for you.

Settlement Funding: Pros

• You can buy time to negotiate a better settlement: Often, an insurer makes a lowball initial settlement offer. This is understandable, as they are trying to pay as little as possible in damages for each claim. However, if your attorney presents a counteroffer and provides evidence of your costs and damages, you should be able to negotiate a better settlement out of court. Sometimes, negotiation and mediation are unsuccessful, and you might need to file a personal injury lawsuit against the defendant in pursuit of compensation. Litigation is time-consuming, and if you are faced with financial stressors, you might be tempted to give in to a poor settlement offer. If you get some of your settlement money early, however, you will have the breathing room to negotiate more effectively.
• Lawsuit loans can be an effective tide-over measure: If medical expenses, rent or mortgage payments, and general living costs are mounting while you need time off work to recover from accident injuries, pre-settlement funding is an efficient stopgap, giving you cash when you need it most.

Settlement Funding: Cons

• Lawsuit loans can be expensive: If you win or settle your personal injury case, you pay the lender from your final settlement funds. If your case takes some time to settle, you could find interest charges mounting. Therefore, consider a legal funding company that charges simple, non-compound interest rates.
• Not all cases qualify for pre-settlement funding: Due to the non-recourse nature of legal funding, the lending company shoulders a great deal of risk. To mitigate this risk, lenders will only offer cash advances if they are confident you will win your case. They also insist that you have legal representation. You may need to approach several legal funding firms before finding one that enables you to access some of your settlement money early.

Access Your Settlement Early Through Uplift Legal Funding

Now that you have seen the benefits and drawbacks of legal funding, you can determine whether it is the right solution for your financial situation.

For those who want to access their settlement early, we charge simple, non-compound interest to keep your costs down, even if your case takes some time to settle.

It’s easy to apply by calling toll-free at (800) 385-3660 or by filling out a simple online application. All you’ll need to provide is the contact information for your legal counsel and the facts of your case.

We will promptly evaluate your claim by consulting your lawyer. If your application is successful, we will send your attorney a funding agreement. You could have a portion of your settlement as soon as the next day.