Do I Qualify for Pre-Settlement Funding?

If you are hurt as a result of someone else’s negligence, you may need to file a lawsuit to recover your financial losses. The law allows injured victims to seek compensation from the liable parties, though what most people don’t realize is that this process takes time. It may be months or even years before your case concludes.

This injury has likely disrupted your life enough. You may need ongoing medical treatments — not to mention any chronic pain. You may be unable to work either on a short-term or permanent basis, meaning that you’re losing your wages. You’ll have added expenses from this injury along with your usual monthly expenses.

You may soon be in financial ruin because a careless person put you in this situation, and now you’ll be waiting a long time to get the compensation you deserve. Pre-settlement funding is an option worth considering to give you the money you need upfront before your lawsuit is concluded.

However, not everyone will qualify for a Tennessee lawsuit loan. Here’s what you should know to get the legal funding you need while you await your compensation.

What Is Required to Qualify for Pre-Settlement Funding?

To apply for pre-settlement funding, you must first meet some basic eligibility requirements.

You Must Have a Valid Lawsuit

You must have a valid lawsuit currently underway with the court. While many cases will settle before they go to trial, the key distinction here is that you must have a lawsuit in motion. You do not have to wait until your trial has begun to get pre-settlement funding. To be eligible, you need to have started the process of your lawsuit.

You Must Have a Lawyer

Another requirement for this funding is that you have to have an attorney representing your case. Lawsuit funding companies work directly with lawyers when they structure the repayment agreements. You will not receive approval on your application if you don’t have legal representation.

You do not need your attorney’s approval to apply for a lawsuit loan, though you do need their representation. Lawsuit lending companies will need to evaluate the risk involved with your case. If your attorney feels confident you’ll win, the funding company will likely approve your application.

You Must Have the Right Type of Case

Pre-settlement funding is only for certain types of lawsuits. These typically include personal injury claims such as car accidents, truck accidents, and other motor vehicle accidents. They can also include slip and fall accidents and personal injury cases that involve serious injuries. If you aren’t sure whether or not the lawsuit loan company will consider you eligible for this funding, ask.

If you meet the requirements for eligibility, then you can proceed with filling out the application. Once approved, you should get a designated portion of your expected settlement amount quickly. In some cases, you may have access to it within 24 hours.

How Can I Use the Money from My Lawsuit Loan?

It can be a relief to get money right away when your finances are quickly depleting. You may be wondering if you’re only allowed to spend it on certain items, but you are free to spend it as you wish.

Keep in mind that it’s best to cover your immediate financial needs while your lawsuit progresses. Many people who get lawsuit loans use them to cover their medical bills from their injuries. They also use it to cover living expenses such as rent or mortgage payments, utility bills, and groceries to feed the family.

You can use this money to pay your legal fees, repay any outstanding debts or loans that have been impacted by your injuries, and other costs such as household cleaning services to help with tasks you can no longer do on your own. There are no rules about how you must spend it, though you should budget accordingly.

While you can sometimes get a secondary lawsuit loan, you should use the money wisely. Remember, you’re essentially borrowing against part of your expected settlement. It certainly buys your attorney more time to negotiate a higher payout on your behalf, though you won’t want to blow through it all too quickly.

What to Know About Repaying Your Pre-Settlement Funding

It’s a great relief when you get approved for a lawsuit loan because you’ll get access to your money right away. However, you may be hesitant to apply, even if you meet the requirements — you might be worried about repaying the loan.

Pre-settlement funding is a non-recourse type of loan that differs from traditional bank loans. If your attorney wins your case, they will get the compensation check from the at-fault party. They will then issue a check to the pre-settlement funding company for the amount that was previously agreed upon for repayment. Your attorney will then subtract any attorney fees that remain from the amount, and you will get the rest.

What happens if your case doesn’t settle? When a personal injury lawsuit goes all the way to the courtroom, tithing might not end in your favor. There are certainly instances where it seems like the plaintiff will be awarded compensation only for the jury to side with the defendant. If you had a traditional loan, you’d have to pay it back regardless of the outcome.

Fortunately, with pre-settlement funding, if you lose your lawsuit and you don’t receive compensation, you do not have to pay anything back. There is no risk to you, making it a safer choice when getting the money you need to keep a roof over your family’s head and food on the table. Speak with your attorney to weigh the pros and cons of obtaining this funding in your situation.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.