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The process of settling a personal injury lawsuit can be long and drawn out. During the period of time that you are waiting on your legal claim to resolve, you may be faced with difficult financial hardships and economic pressure related to your injury. This can come in the form of lost wages due to missed work, mounting medical bills, costs associated with the legal process or just general life expenses. For individuals that need access to funds associated with a pending settlement, pre-settlement funding can help.
Pre-settlement funding is a financial solution that is available to plaintiffs who have pending litigation related to a personal injury or accident lawsuit. Pre-settlement funding comes in the form of a cash advance. This cash advance is based on the potential payout of a future court award. The advance is granted before the legal claim is awarded.
If you have pending litigation and anticipate receiving a settlement, legal funding companies like Pegasus Funding can work with your attorney to see if you are eligible for a cash advance on that settlement. If you win your case, the cash advance amount will be repaid from the settlement. If you lose your case, you don’t owe anything to the legal funders that offered you the advance on your settlement.
How Do Pre-Settlement Loans Compare to Traditional Loans?
Pre-settlement loans are technically not loans. These legal funding transactions are often referred to as pre-settlement loans, but they are actually non-recourse pre-settlement advances. A pre-settlement cash advance is a payment that you receive based on your pending lawsuit. The company advancing funds will review the details of your case to identify the appropriate amount of cash to be advanced .
Unlike traditional loans, pre-settlement cash advances do not require credit checks. The non-recourse nature of pre-settlement loans entitles the lender or funder of pre-settlement advances to repayment only in the event that the pending legal action is successful. Non-recourse financing requires a lawsuit as collateral and a higher interest rate than traditional funding, but in the case of pre-settlement loans or pre-settlement advances, the collateral is based on the potential payout of a future settlement. Because the cash advance associated with the potential settlement is non-recourse, plaintiffs do not face the risk of repayment if their legal claims are unsuccessful.
Pre-Settlement Funding Regulations
The rules and regulations that govern pre-settlement funding vary greatly from state to state. Some states have requirements for contracts. Other states limit payments that can be made in the form of commissions and referral fees or prohibit attorneys from having a direct financial interest in the legal funding transaction. Many states require plaintiffs to inform their attorneys of any contracts related to pending legal funding.
Navigating the different regulations for each state can be challenging, but the legal funding experts at Pegasus Funding believe in ethical pre-settlement funding that can help plaintiffs get the cash they need when they need it most. We work closely with your attorney to ensure that the details of your case are carefully reviewed. Our pre-settlement funding solutions are fair, measured and transparent.
If you are facing mounting economic pressure while waiting for your pending lawsuit to settle, contact Pegasus Funding to discuss pre-settlement funding today.