Pre-settlement funding, also known as litigation financing, is a type of funding that provides money to plaintiffs before their case is settled. This can be an excellent option for people who need money quickly and do not have other options. It can also help plaintiffs avoid financial hardship during the litigation process. This article will discuss pre-settlement funding in more detail and answer some common questions about it.
What are the Basics?
Pre-settlement funding is a type of lawsuit cash advance. Plaintiffs seeking pre-settlement funding submit their claim to a claimant company, paying out money from its capital or third-party investors. This is different from traditional loans, as plaintiffs approved for pre-settlement funding do not need to pay back the money.
Who is Eligible?
Most pre-settlement funding companies like CashInYourAnnuity decide whether or not a plaintiff is eligible for funding based on their case and credit history. Some companies look deeper into a plaintiff’s background and profile, such as their monthly income and debt, while others focus only on credit history. If a plaintiff has bad credit or does not meet the criteria of other funding companies, they can try to apply at multiple companies to secure the money they need.
What Are Some Pros of Pre-settlement Funding?
There are many advantages for plaintiffs that receive pre-settlement funding. Pre-settlement funding is a fast and easy way to get money, as there are no credit checks involved. What’s more, plaintiffs do not need to wait for their case to settle to receive the funds they have been approved for. There is typically no red tape involved with pre-settlement funding so that plaintiffs can expect an answer within days or a few weeks.
What Are Some Cons of Pre-settlement Funding?
It is important to note that pre-settlement funding comes at a cost. Plaintiffs who receive money from pre-settlement funding companies typically need to pay back anywhere between 30% and 45% of their total settlement amount. Pre-settlement funding companies also take a fee depending on how much money is given, ranging from 10% to 30% of the total amount.
When do Plaintiffs Apply for Pre-settlement Funding?
Plaintiffs typically apply for pre-settlement funding when they expect to receive a large settlement and do not have other options available. Plaintiffs may also turn to pre-settlement funding companies when they need the funds as soon as possible. Pre-settlement financing is not usually a good idea for plaintiffs that do not have a large settlement coming, as it will cost them more money in the long run.
Who is Involved?
There are two primary parties involved when it comes to pre-settlement funding. First, there is the claimant company, which provides plaintiffs with money before their case has settled. The other party is the investor, which pays for part of the settlement in return for future interest payments.
How Does Pre-settlement Funding Work?
It takes three steps to get pre-settlement funding. First, after a plaintiff applies to a claimant company, they may receive a phone call or email so that the company can ask them questions about their case and credit history. Second, the claimant company will review the application submitted by the plaintiff and determine whether or not they are eligible for funding. Third and finally, if the claimant company decides to approve the plaintiff for funding, they will inform them. The money can then be sent out to the plaintiff within a few days.
Types of Pre-settlement Funding Companies?
There are many different types of pre-settlement funding companies available to plaintiffs. Some companies focus on lending only, while others help plaintiffs find lawyers to work on their cases. Some companies combine both of these aspects to provide plaintiffs with pre-settlement funding and legal advice.
What are the Different Types of Legal Cases Eligible for Pre-settlement Funding? Although many plaintiffs can theoretically receive pre-settlement funding, it is generally only used in cases involving personal injury. Personal injury cases are the most commonly funded case type because they typically have a more significant settlement amount than other legal cases.
Do Pre-settlement Funding Companies Cover all Lawsuits?
No, pre-settlement funding companies do not provide money to plaintiffs involved in every kind of lawsuit. While personal injury cases are the most commonly used type of case, pre-settlement funding is not available for just any legal matter. Plaintiffs must first apply to any company that offers this type of funding to qualify.