Car accident lawsuit funding offers valuable financial support to help bridge the gap between your accident and eventual legal payout. This form of cash advance allows you to access a portion of your potential settlement now, rather than waiting months or even years for the end of your case.
Many car accident lawsuits settle out of court, but what happens to your pre-settlement lawsuit funding in New York if your case goes to trial? The answer depends on whether you ultimately win or lose the case. But either way, you generally wouldn’t need to repay the funding amount out of pocket.
What Is Car Accident Lawsuit Funding?
Car accident lawsuit funding is a type of no-recourse cash advance for plaintiffs in personal injury lawsuits. If you are like many car accident victims, you may be struggling financially while you wait for an eventual payout from the defendant. Medical bills and lost wages drain your bank accounts, and your regular bills and living expenses continue piling up.
While you expect to eventually receive a settlement or lawsuit payout, your debt is accruing interest in the meantime, and you have limited resources for necessities like medical equipment. Pre-settlement funding allows you to access a portion of your expected settlement now, so that you can begin paying down these expenses and easing your financial burden.
How Car Accident Lawsuit Funding Works
Car accident lawsuit funding generally works like this:
- You apply for funding online.
- You provide information about your car accident case and your attorney’s contact information.
- The funding company verifies the information with your attorney and discusses your expected case value.
- If your application is approved, the funding company offers you a percentage of your estimated settlement as an advance.
- You repay the borrowed amount directly out of your settlement or award, plus any applicable charges under the funding agreement.
- If you ultimately lose your case, you owe the funding company nothing.
As of June 17, 2026, New York’s Litigation Funding Act limits what a funding company can require a consumer to pay for this type of advance. Now, funding companies can ask for repayment of no more than the funded amount plus 25% of the claim’s gross proceeds, subject to statutory limitations.
Eligibility for lawsuit funding does not depend on financial criteria such as your credit score or income. Instead, lawsuit funding companies in New York want to know about the strength of your case and your expected settlement amount. Key criteria often include having an eligible case, being represented by an attorney, and being over 18 years of age.
Factors That May Lead a Car Accident Case To Go to Trial
Settlement is a common outcome in car accident lawsuits. Insurance Research Council research found that 50% of federal motor vehicle tort cases filed from 2014 through 2023 were resolved through settlement, while only 7% resulted in a judgment. Another 15% of cases were withdrawn voluntarily.
However, some factors may increase the likelihood that a case goes to trial instead of settling out of court:
- Major disagreements over fault: Car accident cases often settle out of court when there are no major disputes over which party was actually negligent. If the defendant has not accepted any of the blame, they likely will not offer you a settlement, meaning you may need to go to court and have a judge or jury decide.
- Catastrophic injuries: Car accidents that cause catastrophic injuries are often very high value. A plaintiff might not accept a settlement unless it fully covers all of their economic and non-economic damages. They may view a lawsuit as a better opportunity to gain adequate compensation.
- Uninsured or underinsured drivers: When you sue an at-fault driver who was uninsured at the time of the accident, your payout would come from their personal assets rather than insurance coverage. These defendants may be less likely to settle and prefer to gamble on a lawsuit rather than agree to a guaranteed payout.
- Business or government defendants: When a business entity or government agency is the defendant in a car accident case, it may be less likely to offer a settlement. These entities often have strong legal teams that are prepared to go to trial.
What Happens to Your Funding if Your Case Goes to Trial?
You probably didn’t expect your car accident case to go to court, and now that it is, you have a range of questions about what happens next. If you have already accepted car accident lawsuit funding, you may wonder what will happen to it.
There are generally two possible outcomes, though the exact consequences will depend on your agreement with the funding company. Understanding the potential outcomes is an important step in thoroughly exploring the pros and cons of lawsuit loans before accepting them.
You Win the Trial and Repay the Funding Amount
If you ultimately win your trial, you will likely receive a payout from the defendant. Your attorney would repay the funding company from this payout, potentially even before you receive any of it. They would also take out a fee as part of the repayment, which can vary depending on the cash advance you accept and the funding company’s terms.
You Lose the Trial and Owe Nothing
If you lose your case and do not walk away with a payout, you would generally not need to repay the lawsuit funding company any of the borrowed amount or fees. Lawsuit advances are often a form of non-recourse funding, which means there is little to no risk to you in accepting this type of funding.
The funding company would assume the risk that you lose the lawsuit and walk away without a payout. As such, funding companies generally only offer advances to those with strong cases, where a payout or settlement is very likely.
Explore Car Accident Pre-Settlement Lawsuit Funding From Apex Legal Funding, LLC
If you are interested in applying for car accident lawsuit funding, you can feel assured that whether you win or lose at trial, you will not need to repay this funding out of pocket. Repayment would come only from a potential settlement or award.
At Apex Legal Funding LLC, we offer a range of financial solutions for personal injury plaintiffs. Contact us today at 1-800-377-4934 for more information, then explore the differences between legal funding and personal loans.
Frequently Asked Questions
Do you repay car accident lawsuit funding in installments?
You usually do not repay car accident lawsuit funding in installments, though the repayment structure can vary by company and borrowing terms. The more common structure is to repay the funding as a lump sum from your case proceeds.
What types of expenses can you use car accident lawsuit funding to pay for?
You can generally use car accident lawsuit funding however you see fit. Plaintiffs often use it to pay down debt and avoid accruing interest or fees. You might also use it to purchase medical equipment or continue making ends meet while you are not working and recovering from injuries.
How quickly can you receive car accident lawsuit funding?
You can often receive car accident lawsuit funding within one or two business days after your application is approved and you accept the funding.