Pre-Settlement Funding for Personal Injury Cases: What You Need to Know
Pre-settlement funding, also known as a litigation loan, provides a financial lifeline to those suffering through the long and often arduous litigation process due to a personal injury. Such funds enable those encounter the challenging costs of everyday life, medical bills and even legal fees associated with a lawsuit. While pre-settlement funding can be immensely helpful during this stressful time, it is important to fully understand the process before moving forward with a potential funder.
What is Pre-Settlement Funding?
Pre-settlement funding provides an interim solution for those embroiled in the personal injury lawsuit process. Such loans offer a lump sum payment that helps cover costs associated with everyday living, medical bills, and other expenses. Essentially, instead of waiting for a potential settlement to arrive, an individual has the opportunity to receive funds prior to the resolution of their case—hence the term “pre-settlement.”
The Process Involved with Pre-Settlement Funding
When weighing pre-settlement funding options, it’s important to understand the different types of lenders available and the individual process involved. Various lenders offer differing terms and loan amounts. The application process begins with a few conversations regarding the prospects of a pending personal injury case. Once the individual provides various details, including the age of the case and the lawyers involved, they can receive an instant pre-settlement funding decision within 24 to 48 hours. The funds can arrive within days should the application be approved. After a generous percentage of repayment has been established, the lender will begin paying the bill of the individual’s out-of-pocket medical expenses, as well as other associated costs.
Often, those pursuing pre-settlement funding have the opportunity to acquire funds from a third-party and charitable/governmental organizations, such as nonprofits and local churches. These outlets, although free from paying back a loan, may require a certain level of income and/or proof of financial hardship and difficulty.
The Key Benefits of Pre-Settlement Funding
The key benefit of pre-settlement funding is the financial freedom that such a loan can provide to an individual. Such freedom can alleviate added stress and strain associated with managing everyday costs. Additionally, the arrival of such a lump sum of cash can provide the necessary breathing room to focus on essentials, such as a living situation, food, and medical care.
Additionally, it’s important to note that litigation loans do not require credit checks as they are reliant upon the prospects of a future settlement.
One Thing to Consider
Litigation loans are not absolutely risk-free. The leading risk associated with a pre-settlement loan is the borrower may end up owing more than the initial amount borrowed. Such loans claim high-interest fees and all fees associated with such a loan—including the interest assessed—are taken out of the potential settlement payout. Although this should not deter a person from pursuing pre-settlement funding, it’s important to note all the associated costs.
Conclusion
Pre-settlement funding can provide an individual with the much-needed financial backing to help manage the costs of everyday life, as well as any other costs associated with litigation. Those suffering through a personal injury are eligible to pursue pre-settlement funding and can receive an immediate decision regarding their loan. However, before moving forward, one should carefully consider all fees involved as any fees assessed must be taken out of the potential settlement amount.
