If you’re in the midst of lawsuit proceedings and are patiently waiting for your settlement to become a reality but have found yourself short on income.
In the meantime..
A settlement advance may be the answer you need to bridge the gap between living expenses now and cash flow later.
Settlement Advance, Defined
While there are several terms you may hear when learning about a lawsuit settlement advance (lawsuit funding, settlement funding, pre-settlement loan), they all generally refer to the same thing.
A settlement advance happens when a settlement funding firm purchases a portion of your forthcoming lawsuit settlement payment in exchange for immediate cash.
This cash can be used for living expenses, medical bills, and attorney fees that accumulate during the course of a lawsuit.
Legal proceedings and payout can take several months or even several years, so this inflow of money is often helpful, especially to someone who can’t work due to an injury,
It is important to know that a settlement advance is not a loan. While you will pay fees and interest on the advance, you will not need to pay it back should you lose your lawsuit.
5 FAQs About Settlement Advance
There are often many questions surrounding settlement advances.
Here are the answers you may be looking for before you begin the process of getting yourself an advance.
1. How Long Does It Take to Get a Pre-Settlement Advance?
Getting a pre-settlement advance is quick. As long as your attorney is available to consult with a funding firm, you may get your cash in as little as 24 hours. However, three to four days may be more typical.
2. Which Situations are Eligible?
A number of different lawsuits situations are eligible for a settlement advance, but the most common are personal injury cases, such as:
- Auto accident
- Product liability
- Premises liability
- Medical malpractice
- Wrongful death
In addition, most funding firms will only loan money if you have a strong possibility of winning a substantial settlement. This means you may need to apply to more than one company before finding one that will take on the risk.
3. Is There a Pre-Settlement Advance Limit?
The limit for a pre-settlement advance varies from company to company and can often range from between 15-20% of your expected settlement amount.
This generally means you can get approved for as low as $500 and as high as $100,000.
Please note that since there are fees to get an advance and interest to pay on top of the initial amount received, it is prudent to only request the minimum you need to cover your most pressing expenses and bills.
4. Can I Get More Than One Pre-Settlement Advance?
Yes, you can get more than one pre-settlement advance should your lawsuit take longer than expected and you find yourself short on income again.
The only two stipulations are that you should consult with your attorney first to make sure it’s a good idea and that each funding firm knows about your other advance.
In addition, make sure your expected settlement will cover both advances with their associated fees and interest.
5. What If I Lose My Lawsuit?
Again, since a settlement advance is not a loan, you are not obligated to pay back the amount you received should you lose your settlement.
The funding firm knows of this risk, which is why they only take on clients who have a good chance of winning a settlement.
If you do win your lawsuit but the settlement is much less than expected, you may still be obligated to pay back the full amount of the advance. Some firms do allow for negotiations, though.
The Process for Getting a Settlement Advance
Now that you have all your questions answered, let’s get into the process itself. Here are the 6 basic steps to getting a settlement advance.
- Consult with your attorney to determine if pre-settlement funding is a good course of action for your situation.
- Submit an online application with a pre-settlement funding company.
- The company will contact your attorney and together they will review your case, your chance of winning, and the amount expected to receive in the settlement.
- The company will write an agreement and submit it to you. This agreement will include the amount you are approved to receive and the terms (fees, interest, etc.).
- You will sign the agreement in the presence of your attorney and it will be sent to the funding company.
- The funds will be delivered to your attorney’s office, and then forwarded on to you.
If you’re ready to get the money you need and deserve, talk to your attorney today and get the process started!