How Pre-Settlement Funding Can Help You Get Your Life Back on Track
When you have experienced an injury due to the negligence of another party, the physical and financial toll can be overwhelming. After seeking legal representation, you may be able to be compensated for the damages suffered. Unfortunately, the legal process is often lengthy and it may take months or even years for you to receive your settlement. During this time, you may find yourself in a difficult financial situation. Pre-settlement funding can provide financial relief so you can focus on recovering from your injuries and getting your life back on track.
Pre-settlement funding, also known as lawsuit funding or lawsuit cash advances, is an option for individuals who are waiting for their settlements to be paid out but need finances to cover their expenses in the meantime. It involves securing a loan against your future lawsuit proceeds, meaning that you can receive a portion of your anticipated settlement for immediate use. These loans are known for having short turnaround times and little to no risk to clients since the repayment is contingent upon the successful resolution of the lawsuit. Pre-settlement funding companies take the risk by playing the waiting game and only deserve repayment when and if you win or settle. Pre-settlement funding can provide you with the cash you need to make monthly payments on things such as rent, mortgage, car payments and medical bills while you are awaiting your final settlement.
Although pre-settlement funding can provide short-term financial assistance, it is not the same as a loan or line of credit since there is no fixed repayment amount or schedule. With pre-settlement funding, you only repay the loan when you receive your settlement. The amount borrowed plus the pre-settlement funding fee are then repaid directly from your settlement. Depending on the company you are working with, the repayment amount could be as little as one third of the total settlement amount. And once you receive your settlement, there are no longer any obligations for you to fulfill.
Another advantage of pre-settlement funding is that anyone can qualify for it regardless of their credit history. Because the loan is secured against your future settlement, lenders do not need to conduct a credit check. This can be useful if you have a low credit score or if you have limited resources available. You may be able to receive the funds you need to start getting your life back on track, even if traditional loan options are not available to you.
In addition to providing relief during times of financial crisis, pre-settlement funding can also be beneficial because it gives the claimant leverage in settlement negotiations. With the funds, claimants can be more patient and wait for an amount that is more beneficial to their situation. Without pre-settlement funding, claimants may be forced to accept an unfair settlement because they are in desperate need of money. This type of funding also decreases the pressure from creditors and bill collectors, which can be a major source of stress.
Although pre-settlement funding can be beneficial, it is important to consider all available options before making a decision. It is important to understand the terms and conditions of the loan and how much of the settlement will be taken in fees. Moreover, it is important to understand any potential risks involved in taking out a pre-settlement loan. In some cases, the funding company may end up with a larger share of the settlement than originally anticipated.
Regardless of the situation, understanding how pre-settlement funding can help you can be a critical step in getting your life back on track. By providing financial assistance, pre-settlement funding can be an invaluable option for individuals who are awaiting their settlements but need immediate financial help.
