Pre-Settlement Funding for Medical Malpractice Cases: Pros and Cons

Pre-settlement funding, also referred to as lawsuit funding or lawsuit cash advances, is a way for medical malpractice plaintiffs to receive financing while they wait for their case to be resolved. This type of funding is becoming increasingly popular with medical malpractice plaintiffs who are facing expensive legal bills and need immediate access to funds to cover living expenses and other debts. Pre-settlement funding for medical malpractice claims helps plaintiffs receive speedy payouts and eliminates the need for complicated loans.

While pre-settlement funding can be beneficial for plaintiffs who are unable to afford legal fees on their own, there are drawbacks that need to be considered. Considering both the positives and negatives of pre-settlement funding for medical malpractice cases will help plaintiffs make an informed decision about their case.

Pros

The primary benefit of pre-settlement funding for medical malpractice cases is that it allows plaintiffs to receive quick access to money. Unlike traditional loans and other financing options, pre-settlement funding is not dependent on the plaintiff’s credit score or ability to qualify for a loan. The funding amount is based solely on the merits of the case, and the plaintiff is able to receive money as soon as the case is approved by the funding company. This allows plaintiffs to pay for medical expenses, legal fees, and other everyday expenses while waiting for the case to be resolved.

Pre-settlement funding also allows plaintiffs to wait for a greater payout. With traditional loans and other financing options, plaintiffs typically receive one lump sum payment. However, with pre-settlement funding, plaintiffs can receive multiple smaller payments over the course of their case, allowing them to access more money and potentially receive a greater payout in the end.

Cons

The major drawback of pre-settlement funding for medical malpractice cases is that it is expensive. Pre-settlement funding companies typically charge fees in addition to the loan amount and interest rates can be higher than those of traditional loans. In addition, pre-settlement funding companies also require the plaintiff to sign an agreement that requires them to repay the loan in full, plus any fees and interest, if the case is not successful. If a plaintiff is unable to repay the loan, the pre-settlement funding company can take legal action against them.

Another potential downside to pre-settlement funding for medical malpractice cases is that it can potentially delay the case’s resolution. Some pre-settlement funding companies may require plaintiffs to wait for a longer period of time before they can receive funding. This could potentially lead to lengthy delays in the court process and could cause cases to drag on for longer than necessary.

Conclusion

Pre-settlement funding for medical malpractice cases can be beneficial for plaintiffs who need access to immediate funds in order to cover legal fees and everyday expenses. However, it is important to consider the pros and cons of pre-settlement funding before making a decision to pursue a claim. In order to receive the most benefit from pre-settlement funding, plaintiffs should make sure to research different companies, understand the loan agreement and repayment terms, and determine whether the funding option will actually help them receive a greater pay-out in the end.