How to Get Funds for Pending Lawsuit
If you’re reading this post, perhaps you’re involved in a pending lawsuit and under financial pressure. Lawsuits take time but bills still must be paid on time. In some cases, personal injury lawsuits prevent plaintiffs from earning as they did before the lawsuit. Fortunately, if you need financial support while your case is ongoing, you can get funds for a pending lawsuit situation through various funding options.
In this post, we explain everything you need to know about lawsuit funding, including how it works, eligibility criteria, the application process, and what to be weary of. It is our hope that this post brings a clear understanding of how to get funds for a pending lawsuit in the easiest and most cost-effective way possible.
What Is Lawsuit Funding?
Lawsuit funding—also known as pre-settlement funding, legal funding, or lawsuit loans—is a cash advance provided to plaintiffs involved in ongoing litigation. Plaintiffs can sell a portion of their future recovery prior to the case’s conclusion.
Lawsuit loans are not traditional loans, which imply repayment at some point in the future. If you get funds for pending lawsuit claims, you only repay the advance if you win or settle the case. If you lose, you owe nothing. This is why legal funding contracts are considered non-recourse funding, meaning repayment must come from the case’s proceeds, not the plaintiff personally.
Why People Seek Funds for Pending Lawsuits
Most plaintiffs seek funding for the following reasons:
- Covering living expenses: Legal system delays are a feature of the judicial process. Many lawsuits last months or even years before they conclude. Many plaintiffs, especially ones involved in personal injury cases, struggle to pay rent, groceries, and utilities during this time.
- Medical bills: Injuries from accidents or malpractice often require ongoing treatment. Lawsuit funding helps cover those costs. In fact, many surgeries are paid through surgery lawsuit loans where a lawsuit funding company pays the medical provider directly for treatment.
- Lost income: If you’re unable to work due to your case or injury, lawsuit funding can help replace your wages.
- Leverage: Insurance companies often drag out settlements, hoping plaintiffs will accept low-ball settlement offers due to immediate financial concerns. Getting funds for your pending lawsuit can give your attorney(s) the time and flexibility to work toward just compensation.
Who Qualifies for Lawsuit Funding?
You might be eligible to get funds for a pending lawsuit if your case meets these general criteria:
- You have a strong case: Funding companies evaluate the strength of your claim and likelihood of success.
- You’ve hired an attorney: Most lawsuit funding companies only work with clients represented by a lawyer on a contingency fee basis.
- Your case involves monetary compensation: Legal funding is available if your case can result in monetary compensation. Other cases such as landlord/tenant matters, injunctive relief, and others are not generally eligible.
Common Case Types That Qualify
Some of the most commonly funded cases include:
- Personal injury (e.g., car accidents, slip and fall)
- Medical malpractice
- Employment discrimination or wrongful termination
- Civil rights lawsuits
- Product liability
How to Get Funds for a Pending Lawsuit: Step-by-Step Process
The lawsuit loan process is quick and easy. It involves the following steps:
Step 1: Research Lawsuit Funding Companies
Start by searching for reputable legal funding companies. Look for:
- Transparent terms
- Good legal funding reviews from other plaintiffs
- Competitive rates
- No upfront fees
Good companies provide clear terms, abide by the industry’s best practices, and are communicative. It is always a plus when you can reach a live lawsuit loan representative on the phone.
Step 2: Submit an Application
Once you’ve done your research, simply apply online or over the phone. You do so by providing:
- Your case (jurisdiction, type, status, etc.)
- Your attorney’s contact information
- How much money you need
Step 3: Underwriting
The funding company contacts your attorney to get documentation related to your case. Since these are not traditional loans, there are no credit checks or income or employment status verification. The case’s merits are the primary factor.
Step 4: Approval and Offer
Once approved, the company makes an offer based on the estimated value of your settlement. Offers typically range from a few thousand dollars to $100,000 or more, depending on the size of your case.
Step 5: Receive Your Funds
Once you and your attorney execute the funding agreement, you can receive your cash advance within 24 to 48 hours—sometimes even faster.
Pros and Cons of Getting Funds for a Pending Lawsuit
Like most financial transactions, there are pros and cons. Be sure to consider the following:
Pros:
- Risk-free repayment: You owe nothing if you lose your case.
- Fast access to cash: Some companies fund within the same day.
- No credit check required: Your credit score is not affected.
- You maintain control: Funding often gives your attorneys the ability to negotiate a better settlement.
Cons:
- High fees: Legal funding can be expensive. Rates are generally higher than traditional loans. This is because there are differences between personal loans and lawsuit loans.
- Reduced settlement: Because you must repay the advance (plus fees) out of your settlement, your net payout will be smaller.
- Not regulated in all states: Legal funding exists in an unregulated marketplace in some states. In the past, this limited oversight led to predatory practices.
Alternatives to Legal Funding
Lawsuit funding may not be your only option. Consider these lawsuit loan alternatives before you decide to get funds for a pending lawsuit:
1. Personal Loans
If you have good credit, a personal loan from a bank or credit union may offer lower interest rates. Of course, repayment is due at some point as that is the nature of traditional loans.
2. Family or Friends
Borrowing from loved ones may be the best alternative to getting funds from a pending lawsuit. They may even come with no interest or flexible terms.
3. Credit Cards
Though risky due to high interest rates, credit cards may offer a temporary financial cushion.
4. Attorney Advances
In rare cases, attorneys may help cover small costs if they’re confident in your case. However, ethical rules limit this in many jurisdictions.
FAQs About How to Get Funds for Pending Lawsuit
Q: How much can I get for my pending lawsuit?
A: It depends on the estimated settlement value. Many companies offer 10–20% of your potential settlement amount.
Q: How long does it take to receive funds?
A: Once approved, you could receive money in as little as 24 hours.
Q: Do I have to repay if I lose the case?
A: No. Legal funding is non-recourse, so you don’t have to repay if you lose.
Q: Will applying hurt my credit score?
A: No. Legal funding companies don’t run credit checks.
Q: Can I use the money for anything?
A: Yes. You can use the funds for rent, groceries, medical bills, or any personal expenses. After all, it is your money.
What to Look for in a Lawsuit Funding Company
When choosing where to get funds for your pending lawsuit, consider the following:
- Transparency: The company should disclose all fees and repayment terms in writing.
- Simple contract terms: Avoid companies with confusing language or hidden clauses.
- Flexible repayment: Ensure that you only repay if you win or settle.
- Attorney cooperation: Choose a company that works seamlessly with your lawyer.
Why Choose Fair Rate Funding
You obviously have a choice in who you use for legal funding. We offer:
- Simple and Easy Process – Approval only on the strength of your case.
- Risk – Free Proposition – Only repay if you win your case.
- Rapid Approval and Funding – Approvals often within 24 hrs.
- Up Front Pricing – Absolutely no hidden fees.
Give us a call and learn about your options. We are here to help and are at your service.
Final Thoughts
It’s worth exploring your options to get funds for pending lawsuit needs. Legal funding can provide much-needed relief and give you the power to fight for a fair settlement. But like any financial decision, it’s crucial to understand the terms, assess the risks, and consult with your attorney.
Thank you for your interest in Fair Rate Funding.
