Faq Presettlement Funding

Frequently Asked Questions about Pre-Settlement Funding

As you prepare to take your case to court, you will want to discuss all of your options with your attorney. When a lawsuit has been filed, it is important for you to know and understand all of the steps in the process. According to Common Good, there are 15 million civil cases filed in the United States each year and plaintiffs win 55 percent of the time. Rather than rushing to a settlement, consider how pre-settlement funding can give you the leverage you need to pursue your case and get the best possible result.

What is Pre-Settlement Funding?

Pre-settlement funding, also known as a pre-settlement loan or lawsuit loan, is a type of funding provided for plaintiffs in a lawsuit before a case is resolved either by a court decision or settlement. Pre-settlement funding allows a plaintiff to cover day-to-day expenses while their case is unfolding. A main goal of this type of funding is to give a plaintiff much-needed support in order to reject an unfavorable settlement and progress the case through the legal system. This is an attractive option for plaintiffs facing high medical bills, rising legal fees, and other costs. Pre-settlement funding gives relief for the time being until a settlement or decision can be secured.

What Types of Cases Qualify for Pre-Settlement Funding?

Pre-settlement funding is most often found in personal injury cases where a plaintiff sues an individual or company for negligence and damages. Breaking down the category even further, lawsuit funding can be given to plaintiffs in cases involving motor vehicle accidents, civil rights violations, worker compensation, wrongful death, product liability claims, slip & fall accidents and most any personal injury claim. If you are involved in one of these types of cases or any personal injury claim, consider researching your options for pre-settlement funding so you can get the assistance you need while you await a decision.

How Does Pre-Settlement Funding Work?

Pre-settlement funding works by giving plaintiffs financial assistance without a long delay. Typically within a day you will be able to get an advance against your claim forwarded to you before your case settles. This type of funding is what is known as nonrecourse, meaning that the plaintiff does not owe any money back until a case has been won and you will not need to repay the advance if you lose your case.  A four-step process is used to get you the funds you need to improve your financial situation while dealing with the courts.

  1. Application Phase – Talk with a potential funder that specializes in pre-settlement funding and complete an application for evaluation.
  2. Evaluation Phase – Your funder will research your case and determine whether or not your claim qualifies you for a cash advance. As is the case with nonrecourse loans, your lender will make the ultimate decision on your application as a calculated risk based on their belief that you will win your case.
  3. Sign the Agreement – Once your application has been approved, both you and your attorney will need to sign the agreement.
  4. Receive Your Funding – Most applicants receive their funding within 24 hours after signing the agreement.

Is Pre-Settlement Funding Like a Loan?

No. Pre-settlement funding is unlike a loan because of its nonrecourse nature. A traditional loan requires the borrower to make regular payments on the principal of the loan plus interest. Pre-settlement funding, on the other hand does not require you to pay anything back until your settlement or decision has been reached. If you do not win your case or reach a settlement, you owe nothing back.

Does a Lawsuit Need to Be Filed Prior to Applying for Pre-Settlement Funding?

A lawsuit does not need to have already been filed in order to apply for pre-settlement funding. If you have already filed or plan to file a personal injury or other type of lawsuit, you will be able to get the process started so you can get the cash advance you need for your day-to-day obligations. If you have not already filed, you and your attorney will still provide details on the status of your case so your eligibility can be determined.

Is Pre-Settlement Funding Legal?

Absolutely. The practice of pre-settlement funding has been growing for around the last 15 years or so. Since so many plaintiffs were accepting less than adequate settlements due to their declining financial situation, organizations were founded to assist. Plaintiffs now have less financial burden and pressure when it comes to seeing their case through to the finish and getting the result they deserve.


Infographic: Lawsuits in America,” Common Good, 17 July 2012, Web, 29 June 2014.

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