Legal Funding vs. Structured Settlements

Learn more about how legal funding is different from structured settlements

If you are relatively new to the legal funding world, you are probably wondering what these terms mean. Today, let’s focus on the difference between pre settlement and settlement advances (both forms of legal funding) and structured settlements.

Legal Funding – Pre and Post Settlement Funding

The legal funding industry has many facets, but one of the great divides is pre and post settlement funding. Pre settlement funding often involves more risk for the funder, and thus justifies higher fees and rates.

Pre Settlement Funding

Pre settlement funding offers a cash-upfront solution to the long personal injury legal process.. Personal injury cases can take months or sometimes years to settle. Pre settlement advances are often with ongoing litigation. Plaintiffs can use funding for living or medical expenses, allowing them to pursue higher settlement values. Like personal injury attorneys, pre settlement funding companies offers a no-win, no-pay promise. If the plaintiff does win, the lender takes a portion of the settlement along with interest.

To qualify for a pre settlement advance, the plaintiff must be 18 or older, show some form of injury and have an attorney currently working on their claim. Funding is provided for injuries such as spine and back, birth injuries, amputations, bone fracture and muscle tears, burns, loss of consortium, lost wages or any other injury that requires treatment.

Post Settlement Funding

Settlement funding still comes before settlement disbursal, but after the case concludes. Even if a plaintiff has won, payment and collection of damages often takes months. Because of this, post settlement funding helps bridge the gap between settlement and payout. The purpose of a settlement advance is almost similar to that of a pre settlement advance, only settlement advances tend to have lower rates because the plaintiff’s winnings are considered 100% certain.

Structured Settlements

Unlike a pre settlement funding or post settlement funding, a structured settlement refers to a plaintiff forgoing a lump sum and opting to receive smaller periodic payments on an agreed schedule.

Structured settlements must be agreed to by both parties. In contrast to legal funding companies, structured settlements offer a premium on your lump sum settlement proceeds. Structured settlements have tax advantages in certain cases and can be useful for plaintiffs who are not financially savvy.

Uplift Legal Funding

It is essential to seek professional legal help when filing a claim. If a lawyer is working on your case and you need cash upfront, Uplift Legal Funding can assist you. To learn more about how legal funding works, take a look at our guide to legal funding.

To get help today, apply online or give us a call at (800) 385-3660.