Lawsuit Funding and Post-Settlement Funding
In the past, personal injury plaintiffs had no way to get financial relief other than from bank loans. Bank loans came with serious financial repercussions if they were not paid back in due time. Now, there is another option. Our company has multiple sources that can grant plaintiffs like you access to quick cash to help take care of financial responsibilities until your cases settle. The money is provided as a non-recourse advance which means that if you lose the case, the funds do not have to be repaid. You only repay the money plus a fee if you win.
Difference Between Post and Pre-Settlement Funding
Before you determine how such resources can work for you, you should understand how cash advances work. The term “settlement advances” can mean several things and the funding we are talking about involves two types. Our sources can provide cash advances both pre and post-lawsuit. In other words, settlement advances can be made for cases that are still pending and those that have already been settled.
Litigation financing or litigation funding refers to cash advances that are given for pending cases- cases in progress. Pre-settlement advance funds are risky for the lender because the money is not re-paid unless the case is resolved favorably. This is why our sources are selective when it comes to the types of pending cases that receive approval.
Post-settlement funding refer to funds that are provided for already settled cases. The funding process for these types of cases are pretty straightforward, and it is easy to see why. The plaintiff or applicant has already won his case and is waiting for the funds to be distributed. This means that there is no question of whether the funds will be paid back-there is no uncertainty because the case is already resolved.
For the plaintiff, funding of either kind, presents a win-win situation.
The Benefits of Post-Settlement Funding
Just because a settlement has been reached, doesn’t mean that it will be paid to a plaintiff in a timely manner. It can take a plaintiff as much as one to three months to receive the settlement amount. This can be disadvantageous to anyone who already has credit card debts to pay; debts that accumulated because he had to pay for his medical expenses after the accident that was the subject of his case. Settlement funding can give the ailing individual immediate cash that he can use to resolve pressing financial concerns while his legal case winds down.
Here is how a post-settlement funding scenario would typically play out. Let’s say the plaintiff, Mr. X, was involved in a hit and run. He is suing the trucking company that owns the truck that clipped his vehicle, sent it spinning and injured Mr. X. Fortunately for Mr. X and his lawyer, there were enough eye witnesses to testify in Mr.X’s favor when the case went to court. Plus, evidence that was gathered at the scene proved that it was not the truck driver’s negligence but a faulty brake system that caused the accident in the first place. The trucking company’s insurance company has nothing to go on and knows that it is fighting a losing battle. Long story short, Mr. X is promised a hefty settlement. Unfortunately, Mr. X has already depleted most of his funds to pay for his medical bills. The fact that he was physically incapacitated made him unable to go to work and replenish his savings. He needs $30,000 to tide him over until the settlement is forwarded to him, so he applies for a post settlement advance. Since the case has already reached a settlement, our lending sources will not have any misgivings about granting Mr. X’s request for immediate cash. Once Mr. X receives the settlement amount, he repays the advance and fee, and everyone goes home happy.
Remember, the type of personal injury cases for which lawsuit funding is permitted varies from state to state. Just because a plaintiff can receive settlement advances in one state does mean that the same is allowed in another state. Be sure to find out whether your state allows funding companies to provide plaintiff advances before you commit to anything.
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