Have you ever heard of a pre settlement cash advance? It’s a process of obtaining a loan that is secured against a pending or future lawsuit settlement or award. This type of financing is a viable option for those who are experiencing financial difficulty while waiting for their legal case to be resolved. It can provide you with the financial resources you need to help cover day-to-day expenses, medical bills, and other necessities while you are awaiting payment from a lawsuit settlement.
A pre settlement cash advance is a non-recourse loan, meaning that you will not be required to repay the funds if you do not win your case. It is typically offered by a lawsuit funding company, which is a company that specializes in providing plaintiffs with lawsuit financing. The loan amount is based upon the estimated value of your case and the strength of your legal position.
The process typically begins with the plaintiff submitting an application to the funding company. The funding company will review the application and evaluate the potential value of the lawsuit. The amount of the advance is then determined, with the funding company usually advancing between 10 and 15 percent of the estimated value of the claim.
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Benefits of Pre Settlement Cash Advances
Pre settlement cash advances provide plaintiffs with a number of benefits. These benefits include:
- No credit checks
- No employment verification
- No monthly payments or interest
- Fast access to money
Drawbacks of Pre Settlement Cash Advances
Despite the advantages of pre settlement cash advances, there are also some drawbacks. These include:
- High fees – Funding companies typically charge a fee of around 15 to 25 percent of the advance amount.
- Loss of a portion of settlement – Since the advance is secured against the settlement, you will have to repay the advance with a portion of the settlement.
- No guarantee of success – The funding company assumes all risk, so you still may not win your case.
Conclusion
A pre settlement cash advance can be a valuable financial resource for those who are awaiting a lawsuit settlement. It can provide you with access to money quickly, without having to worry about credit checks or monthly payments. However, it is important to understand the fees associated with the financing, as well as the fact that you will have to repay the advance with a portion of your settlement.
