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What Is Guaranteed Pre-Settlement Funding?

If you've been injured in an accident or are dealing with a personal injury lawsuit, the financial burdens can be overwhelming. Medical bills, lost wages, and other accident-related expenses can quickly accumulate, leaving you in a precarious financial situation. The legal process for resolving personal injury claims can be lengthy, often taking months or even years before a settlement is reached. This is where guaranteed pre-settlement funding comes into play, providing a vital financial lifeline during this challenging period.


Guaranteed pre-settlement funding, also known as a lawsuit cash advance or lawsuit funding, is a financial solution that allows plaintiffs involved in pending legal claims or lawsuits to access a portion of their expected settlement or award before their case is resolved. This funding option is designed to alleviate the financial strain faced by individuals navigating the legal system while pursuing compensation for their injuries or damages.

Guaranteed pre settlement funding hero image. This is a picture of a black piggy bank with coins.

How Does Guaranteed Pre-Settlement Funding Work?


Pre-settlement funding companies specialize in evaluating the merits of personal injury cases and assessing the likelihood of a successful outcome. Their team of legal experts thoroughly reviews the details of your case, including the evidence, liability, and potential settlement or award value.


Based on their assessment, the pre-settlement funding company may offer you a cash advance, which is essentially an upfront payment against your potential future settlement or award. The amount you receive is typically a percentage of the expected settlement value, determined by the funding company's evaluation of your case's strength and projected outcome.


Once your case is settled or a favorable judgment is reached, the pre-settlement funding company is repaid the amount advanced from your settlement or award proceeds. If your case is unsuccessful and you do not receive any compensation, you are not obligated to repay the advance – hence the term "non-recourse." See: Can I Get A Settlement Advance on a Lawsuit


Advantages of Guaranteed Pre-Settlement Funding


  1. Quick Access to Funds: One of the primary advantages of guaranteed pre-settlement funding is the ability to access funds quickly, often within a few days of approval. This can provide much-needed financial relief during a time of significant stress and uncertainty, allowing you to cover essential living expenses, pay medical bills, and maintain financial stability while your case progresses.
  2. No Credit Check or Employment Verification: Pre-settlement funding companies do not consider your credit score or employment status when assessing your eligibility. Their decision is based solely on the merits of your case and the potential for a successful outcome, making it an accessible option for individuals with limited financial resources or poor credit histories.
  3. No Monthly Payments: Unlike traditional loans, pre-settlement funding does not require monthly payments. The repayment is made from your eventual settlement or award, eliminating the burden of managing additional monthly expenses during an already challenging financial situation.
  4. Alleviates Financial Pressure: By providing access to funds, guaranteed pre-settlement funding can help alleviate financial pressure and allow you to focus on your recovery and legal case without worrying about mounting bills or the risk of settling prematurely for a lower amount due to financial constraints.
  5. Maintains Attorney-Client Relationship: Pre-settlement funding companies do not interfere with the attorney-client relationship or the legal proceedings. They operate independently, allowing your attorney to continue representing your best interests without external influence or control. See: Can An Attorney Advance Money to a Client

Considerations Before Obtaining Pre-Settlement Funding


While guaranteed pre-settlement funding can be a valuable resource, it's important to carefully consider the following factors:

  1. Case Strength: Pre-settlement funding companies will thoroughly evaluate the strength of your case and the likelihood of a favorable outcome. A weak or frivolous case may not qualify for funding or may be offered less favorable terms or a lower advance amount.
  2. Fees and Repayment Terms: Pre-settlement funding companies charge fees for their services, which are typically deducted from your eventual settlement or award. It's crucial to understand the fees involved and the repayment terms to ensure you are making an informed decision. Reputable funding companies will be transparent about their fee structures and provide clear documentation.
  3. Impact on Settlement: While pre-settlement funding companies do not technically have control over your case or settlement negotiations, the existence of a funding agreement may influence the settlement process and the final amount received. It's important to discuss the potential implications with your attorney.
  4. Reputation and Transparency: Research the reputation and transparency of the pre-settlement funding company you are considering. Look for companies that are upfront about their fees, terms, and conditions, and have a track record of ethical business practices and client satisfaction.
  5. Alternative Options: Before pursuing pre-settlement funding, consider alternative options, such as personal loans, lines of credit, or assistance from family and friends. While these options may require credit checks or monthly payments, they may offer more favorable terms depending on your specific circumstances.


The Pre-Settlement Funding Process


If you decide to pursue guaranteed pre-settlement funding, the process typically involves the following steps:

  1. Application: You will need to complete an application with the pre-settlement funding company, providing details about your case, including the nature of your injuries, the parties involved, and the current status of the legal proceedings.
  2. Case Evaluation: The funding company's legal team will thoroughly review your case, including medical records, police reports, witness statements, and any other relevant documentation. They will assess the strength of your case, the liability of the responsible parties, and the potential settlement or award value.
  3. Offer and Agreement: If the funding company deems your case eligible for pre-settlement funding, they will present you with an offer, outlining the amount of the cash advance and the associated fees. Review the agreement carefully and consult with your attorney to ensure you fully understand the terms and conditions.
  4. Funding Disbursement: Once you accept the offer and sign the agreement, the pre-settlement funding company will disburse the cash advance to you, typically within a few business days.
  5. Case Resolution: As your case progresses, your attorney will continue to represent your interests and negotiate a settlement or pursue a favorable judgment. Upon successful resolution, the pre-settlement funding company will be repaid the agreed-upon amount from your settlement or award proceeds.

Guaranteed pre-settlement funding can be a valuable financial resource for individuals facing personal injury lawsuits or other legal claims. By providing access to funds during the legal process, it can alleviate financial stress and allow plaintiffs to focus on their recovery and case without the pressure of settling prematurely. However, it's essential to carefully evaluate the terms, fees, and the potential impact on your case before deciding if pre-settlement funding is the right choice for your situation.

Selecting a Pre-Settlement Funding Provider


Researching and Comparing Companies: Conduct thorough research on pre-settlement funding providers. Compare their reputation, customer reviews, and Better Business Bureau ratings. A reputable company should have a transparent track record, ethical practices, and clear terms and conditions.


Reading and Understanding Contracts: Carefully review the terms of the funding contract. Pay attention to fees, interest rates, and repayment structures. Ensure that the agreement is clear and free of ambiguous language. If needed, seek legal advice to fully understand the implications of the contract.


Seeking Legal Advice: Consult with your attorney before finalizing any pre-settlement funding agreement. Legal professionals can provide valuable insights into the potential impact of funding on your case and negotiate favorable terms with the funding company. Having an attorney involved ensures that your interests are protected.


Checking for Hidden Fees: Be vigilant for any hidden fees that may not be immediately apparent. Some funding companies might impose additional charges, such as application fees, underwriting fees, or processing fees. Clarify the complete cost structure before committing to a specific provider.


Considering Customer Service: Evaluate the customer service and responsiveness of the funding company. A reliable provider should be accessible to address your inquiries promptly. Effective communication is crucial throughout the funding process, from application to the resolution of your case.


Checking for Ethical Practices: Choose a pre-settlement funding provider that adheres to ethical practices. Avoid companies engaging in aggressive tactics, excessive advertising, or those that pressure you into accepting their services. Ethical providers prioritize transparency and ensure that clients make informed decisions.


Verifying Licensing and Compliance: Ensure that the pre-settlement funding provider is licensed and complies with applicable regulations in your jurisdiction. Confirming their legal standing provides additional assurance of their legitimacy and commitment to operating within the bounds of the law.


 

The Role of Attorneys in the Process


Attorney Cooperation: Attorneys play a crucial role in pre-settlement funding by collaborating with funding companies to facilitate the process. They assist clients in preparing and submitting necessary documentation, provide case details to the funding company, and communicate directly to ensure a smooth and efficient funding process.


Assessing Funding Options: Attorneys help plaintiffs assess their pre-settlement funding options by considering the financial implications on the overall case. They provide advice on the appropriateness of seeking funding, the potential impact on the final settlement, and help clients make informed decisions that align with their legal and financial objectives.


Negotiating Funding Terms: Attorneys negotiate with pre-settlement funding providers to secure favorable terms for their clients. This may include advocating for lower fees, reduced interest rates, and clear repayment structures. Their involvement ensures that the funding arrangement is in the best interest of the client.


Protecting Client Interests: Attorneys act as advocates for their clients' best interests throughout the pre-settlement funding process. They review funding contracts, identify any potential pitfalls or ambiguities, and ensure that the terms align with the client's legal strategy and financial well-being. This safeguards clients from unfavorable conditions.


Addressing Liens and Subrogation: Attorneys navigate the complexities of liens and subrogation rights associated with pre-settlement funding. They work to protect their clients from any potential complications related to repayment obligations, ensuring that the funding company's claims are appropriately addressed in the settlement.


Ensuring Ethical Practices: Attorneys play a vital role in ensuring the ethical practices of pre-settlement funding providers. They guide clients toward reputable funding companies, scrutinize contracts for fairness and transparency, and advise against engaging with providers who may exploit the financial vulnerabilities of plaintiffs.


Maintaining Attorney-Client Privilege: Attorneys uphold attorney-client privilege throughout the pre-settlement funding process. They ensure that all communications with funding companies do not compromise the confidentiality of the attorney-client relationship, protecting sensitive information related to the legal strategy and case details.

 

 

Conclusion

Pre-settlement lawsuit funding can be a valuable resource for individuals facing financial difficulties during the course of a legal case. However, it is crucial for plaintiffs to carefully consider the terms, costs, and potential impacts on their settlement before pursuing such funding. Consulting with legal professionals and conducting thorough research on funding providers will help ensure a well-informed decision. If you think pre-settlement lawsuit funding may be right for you, JG Wentworth can help!

 

* JG Wentworth does not provide pre-settlement funding services. All leads are brokered to unaffiliated third party providers by Peachtree Funding Northeast, LLC.

The information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.



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