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You Can Fund Your Lawsuit Pre Settlement

Sometimes in order to bring a lawsuit, you need pre settlement funding. It might surprise you to find that this is available to you. It's in the form of a non-recourse cash advance -- and since it's non-recourse, you don't have to pay it back if you lose. You only sign an agreement to pay it back if you win, which will be taken directly out of your settlement.

The risk to the lender in this sort of cash advance can be significant, which means that the lender has to charge a fairly high fee in order to cover his costs. Depending on the lawsuit and the amount you're suing for, your cash advance may be as high as $100,000; more often, it's going to be closer to around $25,000. The fee for the cash advance on top of this will be significant, perhaps as much as 15% per month.

Who Should Get Pre Settlement Funding?

Because the fees for pre settlement funding can be so high, this is a last-resort method for funding your lawsuit. If you can fund your suit in any other way, whether it's by hiring a lawyer on contingency (in which they retain a percentage of your settlement) or by borrowing money in some other manner, you're probably going to save money. Unfortunately, the reality is that if you've been injured, there's a very good chance that you don't have the resources to borrow money in a traditional way.

If it's a choice between bringing your lawsuit and not having any recourse at all, it's better than nothing. If you do choose to go with this sort of funding, be certain to shop around to different providers. Not only do they charge widely varying fees. but they also charge fees with different methodologies. Some may charge a monthly percentage, while others charge a flat fee. If you do go with a monthly-percentage company, tally your total up as if your lawsuit will take twice as long as you expect. Just be certain you understand how pre settlement funding works before you borrow anything.

You also need to understand the legalities involved in this sort of lawsuit funding. For instance, by law your lawyer may not provide this sort of funding to you; it creates a conflict of interest. And some states may not allow it; in Ohio recently, a court ruled that pre settlement lawsuit funding is illegal because it's a form of gambling on whether you'll win or lose a suit. The lawyer representing you in your lawsuit should know what the law says in your state.

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