If you’ve recently suffered injuries from a hit and run, you may be confused about your legal options. You’re likely facing expensive medical bills, potential time off from work, and a long and complicated claims process. While your insurance settlement might eventually cover your costs, how will you pay for all of these expensive bills in the meantime?
That’s where pre-settlement funding comes in. Lawsuit funding companies in New York offer critical financial relief for accident victims as they await their case settlements. In our guide below, our team from Apex Legal Funding, LLC, will explain exactly how this works so you’re prepared to access the funding you need for your recovery.
What Is Lawsuit Funding and How Does It Work?
On average, hit and runs account for 11% to 12% of all accidents in the U.S., at least based on the nine-year span from 2006 to 2015. They’re so common that in 2015, the total number of accidents translated to one hit and run every 43 seconds. Clearly, a concerning number of accidents involve missing liable parties, often leading to long and complicated claims processes.
Lawsuit funding aims to bridge this gap. Pre-settlement cash advances operate as non-recourse loans, meaning you do not need to pay them back if your case does not pay out.
The funding company evaluates your case and offers an appropriate amount of cash based on the perceived strength and potential settlement amount. You can then use this cash advance to pay for anything you need, whether that’s medical bills, rent, groceries, child care, or whatever else. Once your case concludes, you will be able to use your settlement to pay back the lender and any fees included in your contract.
How Is Pre-Settlement Funding Different From a Normal Loan?
While it may sound like a loan, it’s important to note how pre-settlement funding differs from traditional lending. These non-recourse loans offer significant advantages over standard personal loans, making them a flexible choice for victims who are already experiencing financial hardship. Here are the main differences:
- Faster approvals and payouts: Lawsuit funding companies in New York generally aim to complete the case evaluation and payout process as quickly as possible, as they understand the challenging situation victims might be in. After your application is approved, you can often access cash in just 24 hours. Traditional loans, in comparison, usually take multiple business days.
- Fewer risks: Traditional loans must be paid off. If you sell a car for less than you bought it for and your proceeds don’t cover the remainder of your loan, you face the consequences. On the other hand, pre-settlement funding comes with minimal risks, as you won’t need to pay the lender back if your case loses.
- The allowance to use the funds as you please: Certain traditional loans require you to use the funding for specific purchases. With legal claim financing, you’re encouraged to use the cash advance for any of life’s expenses.
- No credit history review: Traditional lenders evaluate your borrowing history, credit score, and debt-to-income ratio before offering financing. Settlement funding companies do not evaluate financial merit, as they’re only interested in case strength. You won’t have to worry about improving your credit score before applying.
How Much Can You Get a Lawsuit Advance For?
Your pre-settlement funding amount depends on the strength and potential of your case. Lenders typically evaluate the following criteria:
- The extent of damages incurred
- Claim validity
- Liability evidence (not as relevant in hit-and-run cases, but may be considered if the driver is identified)
- Insurance coverage, such as Uninsured Motorist (UM) coverage for your injuries or collision coverage for your vehicle repairs
- Legal representation, which is typically required for approval
According to 2023 data, on average, motor vehicle collisions cost $6,300 when only property damage occurs and no one is injured. When an evident injury does occur, this average figure skyrockets to $44,000 per crash. The figures only increase with disabling injuries ($167,000 in average costs) and fatal accidents ($1.9 million).
This data can help us estimate how much accident victims may be able to access through pre-settlement funding. According to Annuity.org, plaintiffs can typically be approved for 10% to 20% of their expected settlement total.
If we use the example of an accident causing evident injury, costing an average of $44,000 per crash, the plaintiff may be able to access around 15% of this expected settlement, which would be a cash advance of $6,600. Remember, this is just an example, and actual figures depend on case details.
How Lawsuit Funding Companies in New York Help Support Hit-and-Run Victims
Pre-settlement funding can offer a unique level of support for hit-and-run victims in multiple ways. In an obvious sense, it helps alleviate the financial burden of paying for medical expenses and other day-to-day costs while awaiting settlement. These costs add up especially quickly when victims are unable to work because of their injuries.
Beyond this, pre-settlement funding can potentially reduce the pressure to accept a low-ball offer. Accident victims often feel tempted to accept the very first offer that comes their way because of the financial burdens they’re facing. A cash advance creates more breathing room to negotiate with insurers for a potentially higher settlement.
Pre-settlement funding can also provide a sense of stability during an otherwise uncertain time. Hit-and-run cases can take longer to resolve than standard car accident claims, especially when investigations are ongoing or uninsured motorist claims are involved. Having access to funds during this period can allow you to stay current on rent or mortgage payments, utilities, and other essential obligations without falling behind.
Do You Need Your Settlement Cash Now?
Pre-settlement funding may be your answer if you’re facing financial hardship after a hit and run. You can learn more about this option in our complete guide to pre-settlement funding for car accidents.
If you’re ready to apply or have any questions about our non-recourse pre-settlement loans, call Apex Legal Funding, LLC, at 1-800-377-4934. We offer 24-hour cash advances for accident victims who need cash now.
FAQs
If you still have questions about the pre-settlement funding process, find more information below:
Do You Owe the Funding Company Money if Your Settlement Is Lower Than Expected?
No, if your settlement turns out to be lower than your total cash advance, the funding company incurs the loss. Your repayment is tied to your case proceeds. If the claim is unsuccessful, you generally do not owe the advance back.
Does Plaintiff Funding Come With Fees?
Yes, plaintiff funding companies typically charge low monthly fees that accumulate throughout the loan duration. These fees can be paid back along with the loan amount through your settlement payout. You should be provided with a clear fee structure upon application approval, so be sure to verify details before accepting any offers.
How Do You Apply for Pre-Settlement Funding?
You can apply for pre-settlement funding by initiating the process online with your chosen lender. This involves providing the company with a few basic details about your case, along with your attorney’s contact information. The funding company will contact your attorney for more information when conducting the case evaluation before providing an approval or denial of your request.