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Pre-Settlement Funding

Understanding Pre-Settlement Funding

If you’re involved in a lawsuit, it’s possible that your financial situation may become strained. Medical bills and living expenses can quickly pile up while waiting for a settlement to be reached. This is where pre-settlement funding comes into play.

➽ What is Pre-Settlement Funding?

Pre-settlement funding, also known as litigation financing, is when a company provides cash advances to individuals awaiting the outcome of their personal injury or other pending lawsuits. The plaintiff can use the funds received from this type of financing to cover any immediate expenses such as medical bills, mortgage payments, or living expenses during the legal process.

➽ How Does Pre-Settlement Funding Work?

The way this settlement advance works varies depending on the provider. However, most companies will evaluate your case and determine how much they believe you’ll receive in the final decision. From there, they offer you an advance on that amount which can range anywhere from $500 – $100k+. If approved for pre-settlement funding, you typically won’t have to pay back anything until after your case has been settled.

If you have a structured settlement or annuity providing ongoing payments, you may have considered selling your future payments for an immediate lump sum of cash. Contact us today to sell your structured settlement or annuity payments and transform those future payments into money you can use now. We’ll provide a fair offer and expedited service so you can quickly access your cash.

Lawsuit Loans vs. Traditional Loans

A key difference between traditional loans and lawsuit loans (pre-settlement) is that with traditional loans, interest begins accruing immediately, whereas, with lawsuit loans, no interest accrues until after the case has been settled successfully.

➽ Why Choose Pre-Settlement Funding Over Traditional Loans?

  • No Credit Checks: One major advantage of pre-settlement funding over traditional loans is that there are no credit checks involved. This means that even if you have a poor credit history or no credit at all, you may still qualify for this type of financial assistance.
  • No Collateral Required: Since lawsuit loan companies base their decision on the merits and potential value of your pending lawsuit rather than your personal assets, there’s no need to put up any collateral when applying for pre-settlement funding.
  • Faster Approval Process: The approval process for pre-settlement funding tends to be much quicker compared to traditional bank loans. In some cases, applicants can receive funds within just a few days after submitting their application.
  • Risk-Free Repayment Terms: With most reputable pre-settlement funding companies like Fairfield Funding, you only pay back the advance if you win your case or reach a favorable settlement agreement with the defendant(s). If you don’t receive any compensation from your lawsuit, you mostly don’t have to pay back the advance.

How to Qualify for Pre-settlement Funding

To qualify for pre-settlement funding, it’s essential that you:

1. Have a Pending Lawsuit

You must have an active lawsuit in progress with the potential to receive a monetary award from either a settlement or verdict.

2. Work With An Attorney Who Is Handling Your Case

This ensures that there’s a legal professional involved in assessing the potential value of your claim and negotiating on your behalf during settlement discussions or trial proceedings.

 Additionally, most reputable lawsuit loan companies will require communication with your attorney before approving any cash advances to verify the details of your case and ensure transparency throughout the process.

➽ Types of Cases Eligible for Pre-Settlement Funding

While each pre-settlement funding company may have its own specific criteria for determining eligibility, some common types of cases that are often considered include:

  • Personal injury claims, such as car accidents, slip and fall incidents, and medical malpractice cases.
  • Employment discrimination lawsuits, including wrongful termination, harassment, or wage disputes.
  • Civil rights violations, such as police misconduct or unlawful imprisonment.
  • Product liability cases, where a defective product has caused harm to consumers.
  • Wrongful Death

How Does Pre-Settlement Funding Work?

Step #1: Application Process

The first step in obtaining your settlement advance is submitting an application with a reputable company that specializes in providing these types of loans. 

Most companies offer online applications that can be completed quickly and easily by providing basic personal information as well as details about your pending lawsuit, such as attorney contact information and estimated claim value.

Step #2:  Determining Eligibility

Submitting your request for pre-settlement funding, the lender will inspect it alongside any accompanying papers presented by either you or your lawyer to decide if you are eligible for a cash advance. Factors considered during this evaluation include:

  • The strength of your case: Companies want to ensure they are investing in cases likely to result in favorable outcomes for plaintiffs.
  • Your current financial situation: Your need for immediate funds may also impact eligibility decisions.
  • The anticipated settlement amount: The higher the potential award from your lawsuit, the more likely you are eligible for pre-settlement financing.

Step #3: Receiving Funds

If you are approved for pre-settlement funding, the company will provide a cash advance based on a percentage of your expected settlement or verdict award. The advance sum typically ranges from 10-20%, contingent upon multiple elements, such as the strength of the case and economic necessity.

Step #4: Repayment Terms

One key difference between settlement loans and traditional loans is how they are repaid. With lawsuit loans, repayment occurs when you receive your settlement money or verdict award rather than being paid back in regular installments like traditional loans. If you win your case, the pre-settlement funding company will collect their principal investment plus any agreed-upon fees directly from the awarded funds before disbursing the remaining balance to you.

In some cases, if a plaintiff does not receive compensation from their lawsuit (i.e., loses their case), they might still be responsible for repaying the advance provided by the pre-settlement funding company; however, this depends on specific terms outlined in individual agreements with each provider.

Understanding Simple Vs. Compounding Rates

If you’re considering pre-settlement funding, it’s important to understand the true costs before signing any agreements. One factor that can significantly impact how much you owe is the type of interest rate charged on your borrowed funds.

➽  Simple Rates

A simple interest rate means that interest is only charged on the amount you finance. This means that if you borrow $10,000 and have a 10% annual simple interest rate, you will pay $1,000 in total interest charges over one year.

This type of rate may be more straightforward for borrowers to understand since they know exactly what their payments will be each month. 

➽  Compounding Rates

A compounding interest rate means that interest is added to your balance and compounds over time. That means each time new interest accrues, it applies not only to the principal but also any previously accrued interest – this makes a significant difference, especially if your lawsuit drags on for years!

In other words, with compound rates applied over an extended period, such as years-long lawsuits, every new charge applies not just to your initial loan amount but also to earlier charges! It can quickly add up!

Fairfield Funding is one of the leading pre-settlement funding companies. We offer pre-settlement funding, pre-settlement lawsuit funding, and pre-settlement advances to help you get the settlement money you need. As a responsible consumer legal funding company, we want you to make an informed decision. Our lawsuit funding experts can help you understand how lawsuit loans work and whether it’s the right choice for you. 

We offer competitive interest rates and flexible repayment terms so you can pay back the loan on your own terms. Don’t let pending lawsuits, medical bills, or living expenses pile up. 

Contact Fairfield Funding today to get the cash you need while you wait for your expected settlement. 

What Are the Benefits of Pre-Settlement Funding?

A. Immediate Financial Assistance

B. No Credit Checks or Employment Verification Required

C. Non-recourse Loans

D. Reduced Stress During Legal Proceedings

E. Eases Financial Pressure From Mortgage Payments

F. Increased Bargaining Power

E. No Restrictions on How Funds Are Used

Risks Associated With Pre-Settlement Funding

The primary danger of advance cash for settlement is that if the litigant does not win their case, they might still be liable for reimbursing the advance even though no money has been acquired from their lawsuit. Settlement loans may come with other potential risks and factors to consider.

A. High-Interest Rates

Given their elevated rates, pre-settlement funding can quickly accumulate over time to a repayment amount greater than the original sum borrowed. These rates can accumulate quickly over time, leading to a significantly larger repayment amount than initially borrowed.

B. Impact on Settlement Negotiations

In some cases, accepting pre-settlement funding may impact your settlement negotiations negatively. Since you have already received an advance payment based on your expected settlement value, you might feel pressured to accept a lower offer so that you can repay your debt sooner rather than holding out for fair compensation.

C. Potential Loss of Privacy

To determine eligibility and calculate potential advances, pre-settlement funding companies typically require access to detailed information about your lawsuit and personal finances, which could result in a loss of privacy or confidentiality during the process.

➽ Determining Whether Pre-Settlement Funding Is Right For You:

  • Evaluate alternative options: Before applying for this advance litigation funding, consider other financial assistance options such as personal loans or borrowing from friends and family.
  • Research multiple companies: Compare the interest rates, fees, and terms of various pre-settlement funding companies to find the best fit for your situation.
  • Consult with your attorney: Discussing the potential risks and benefits of pre-settlement advances with your legal counsel can help you make an informed decision about whether this type of financial assistance is right for you.

How Much Can I Receive From Pre-Settlement Funding?

The amount you can receive from pre-settlement cash depends on several factors, including the expected value of your lawsuit and your current financial situation. Generally, most companies will provide up to 10% of the expected value of your lawsuit as an advance payment. However, it is important to note that each case is unique, and the specific amount offered may vary depending on various aspects.

➽  Factors That Affect Pre-Settlement Funding Amounts

  • Strength of Your Case: The stronger your case appears in terms of liability and damages, the more likely a pre-settlement funding company will be willing to offer a larger cash advance.
  • Potential Settlement Value: Companies assess the potential settlement or verdict award based on similar cases previously settled or tried in court. This helps them determine how much they are willing to advance.
  • Your Financial Needs: Some companies take into account your personal financial needs when determining how much money they are willing to provide as an advance.

To get an idea about how much you might qualify for with different pre-settlement funding companies, it’s essential to research multiple options before making any decisions. You can start by comparing offers from top-rated lawsuit loan companies, which specialize in providing cash advances for pending lawsuits like yours.

➽  Avoid Overborrowing

Borrowing too much through a lawsuit cash advance could lead to difficulties repaying if you do not receive a favorable outcome in your legal case or if your settlement ends up being less than anticipated. It’s crucial only to borrow what you need to cover your immediate financial needs and avoid taking on unnecessary debt.

➽  Repayment Terms

Be aware that the sum you get from pre-settlement financing must be paid back, plus any applicable fees or interest. It’s essential to understand the repayment terms before accepting a cash advance. Some companies offer more favorable terms than others, so it’s crucial to compare different litigation funding companies before making a decision.

Pre-Settlement Funding Alternatives

If you’re waiting for a lawsuit settlement, advance cash for settlement can be an option to help cover your expenses while you wait. However, it’s important to consider all of your options before making a decision.

➣ Personal Loan

A personal loan from a bank or credit union is one alternative to your lawsuit cash advance. Personal loans typically have lower interest rates than cash advances and don’t require collateral like structured settlements do. You’ll need good credit and proof of income to qualify for most personal loans.

Here’s some more information on personal loan rates from Bankrate.

➣ Credit Card Cash Advance

You could also take out a cash advance on your credit card if you have available credit. This option has higher interest rates than personal loans but may still be less expensive than pre-settlement funding, depending on the terms of your card agreement.

➣ Help From Family And Friends

If possible, asking family or friends for financial assistance could be another alternative to settlement loans. It’s important to discuss repayment terms upfront and put them in writing so everyone is clear about expectations.

Make A Wise Decision!

Pre-settlement funding can be a valuable resource for those who are waiting on a legal settlement or judgment. It allows individuals to receive money upfront to cover expenses and bills while they wait for their cases to be resolved.

To qualify, applicants must have a pending lawsuit or claim and work with a reputable pre-settlement funding company. While there are benefits to this type of funding, it’s important to understand the risks associated with it as well.

If you’re looking to opt for pre-settlement financing, it’s important to research different providers before making any final decisions about accepting offers. Ensure responsible consumer legal funders like Fairfield Funding are considered first because not all lenders follow ethical practices. 

Fairfield Funding is a trusted provider of pre-settlement funding and can help guide you through the process to make sure you’re making an informed decision.

At Fairfield Funding, our knowledgeable staff can assist you in obtaining the financial assistance you need during challenging times. 

Contact us today at FairfieldFunding.com to learn more about our services and how we can help you.


Q. When is Pre-Settlement Funding Appropriate?

If you have been injured in an accident and are facing financial difficulties due to medical bills, loss of income or other expenses related to your injury, pre-settlement funding may be a viable option for you. This type of cash advance can help alleviate some of the financial stress that comes with pending lawsuits.

Q. Does the Defendant Find Out About Your Pre-Settlement Funding?

No, the defendant won’t be informed about your application for pre-settlement funding. The process is entirely confidential and only involves necessary parties like yourself, your attorney, and the pre-settlement funding company you choose.

Q. How Long Does It Take to Get Legal Funding?

Once all necessary documentation has been submitted and reviewed by the litigation financing company’s underwriters, approval usually only takes 24-48 hours. This means that within two days of submitting all required paperwork, funds could be deposited into your account directly from the lender without any intermediaries involved.


  • In some cases where more extensive research may be needed on certain aspects of the case before making an informed decision about whether or not someone qualifies for this type of loan – especially if there are questions around liability – it might take longer than usual (upwards of 72 hours). But generally speaking, most applications should receive their answer within just 48 hours!

Q. What Happens If You Lose Your Case?

If you’re considering pre-settlement funding, it’s essential to understand the potential risks involved. One of the most significant concerns for plaintiffs is what happens if they lose their case. While no one wants to think about losing a lawsuit, it’s an unfortunate reality that must be considered.

The good thing is that even if you lose the case, you won’t have to pay the advance back. This is the reason funding companies charge additional fees as they take the risk too.


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