Can I receive pre-settlement funding for a car accident case?
Receiving pre-settlement funding for a car accident case can provide financial relief for accident victims at the time they need it most. Unfortunately, it is not an option for every accident victim, as certain criteria must be met in order for the individual to be eligible for pre-settlement funding.
What is Pre-Settlement Funding?
Pre-settlement funding, also known as a lawsuit loan, is a type of funding provided to accident victims that helps cover expenses associated with their car accident case in exchange for a portion of the settlement amount. It is a legal form of financial assistance that is backed by a third-party lender, who agrees to pay the funds upfront and will be repaid when the victim successfully settles their case. It is an increasingly popular option for those who cannot afford to wait until the case is resolved to receive funds to help pay for medical bills, court costs, attorney fees, and other expenses related to the accident.
Criteria for Pre-Settlement Funding
Receiving pre-settlement funding for a car accident case depends on a variety of factors. The most important is whether or not the accident victim has a valid and viable legal case. This means that the claimant must know the other party was at fault for the accident and can demonstrate sufficient liability and damages. The pre-settlement lender will assess the claimant’s case to determine the likelihood of success.
In order to qualify for pre-settlement funding, a prospective claimant must meet the criteria of the funders, such as plan document review, verified damages, and lien share waiver. Plan document review is used to assess the strength of the case, damages must be verified to ensure that the damages requested matches the records, and lien share waiver ensures that all liens associated with the case are settled prior to the pre-settlement funding. All of these documents must be signed by both the claimant and the attorney to make sure that everyone is protected.
Fees and Costs
When applying for pre-settlement funding, there may be certain fees that are associated with the loan. These fees typically include an application fee, origination fee, service fee, and late fee. These fees are all part of the cost of the loan and are applied to the overall settlement figure. The fees vary depending on the lender, so it is important to research the company and understand the costs associated with the loan before applying.
The amount of money a claimant can receive from a pre-settlement loan also depends on the particulars of their case and the lender. Generally, most funders offer advance payments starting at about $500 and up to advances of $250,000. The amount a defendant is approved for will depend on the estimated settlement amount, the legal fees associated with the case, and other factors.
Benefits of Pre-Settlement Funding
For accident victims who are unable to wait for their case to be resolved to receive funds for medical bills and other expenses, pre-settlement funding can be a helpful and beneficial solution. Additionally, pre-settlement funding can provide much-needed financial relief, allowing claimants to focus on fighting their case rather than worrying about financial hardship.
Unlike traditional forms of loan, pre-settlement funding imposes no risk on the claimant. The funds given are based on the estimated value of the case and if the claimant does not win their case, they will not have to repay the loan. Furthermore, with pre-settlement funding, the claimant will not have to pay an additional interest fee.
The Bottom Line
Car accident victims may be able to receive pre-settlement funding to help them pay for medical bills and other expenses associated with the case. However, it is important for claimants to understand the criteria and fees associated with pre-settlement funding before applying. Although it may provide much-needed financial relief, it is important to understand how it works and the associated risks.
