According to the Bureau of Justice Statistics, the typical auto accident suit takes about a year to settle. In many complex and disputed cases, the timeframe is even longer. During this period, accident victims still have to shoulder medical bills, living expenses, and other costs, often while being unable to work because of their injuries.
Pre-settlement funding and lawsuit loans in NYC can reverse this scenario by giving accident survivors and their families more leverage, especially when fighting large corporations with enormous resources.
How Does Pre-Settlement Funding Work?
Pre-settlement funding, a.k.a. lawsuit loan or legal funding, is a cash advance plaintiffs can collect while their case is pending. You only repay the funding whenever your case settles.
The Lawsuit Information Center states that the average personal injury award in NY is over 287,000 in compensatory damages. This may sound like a lot, but remember that this number only reflects cases that go to trial, which is a small minority of all personal injury lawsuits. The average injury case will settle either through an insurance claim or during a pre-trial stage.
Bigger, more complex cases with a potentially high settlement or award often take longer. Accident victims may face years of litigation. People could drain all their financial resources trying to cover medical costs, mortgage, rent, and everyday expenses. Pre-settlement funding could tide them over until their case resolves.
What’s the Advantage of Pre-Settlement Funding?
Dragging out personal injury claims and lawsuits is a common tactic. Insurance companies and lawyers often use it to exhaust the plaintiff’s financial resources and pressure them to settle for less than their case is worth.
If you’re facing bankruptcy and foreclosure on your home, you may have no choice but to accept any offer for quick financial relief. These situations give unfair leverage to the side with bigger financial resources and make it much harder for victims to seek justice.
Pre-settlement funding reduces economic strain on the plaintiff. It gives injured people financial breathing room so they can make strategic decisions without worrying about day-to-day survival. Yes, a pre-settlement loan will cost money through interest, but the potential difference in your settlement will often surpass that.
How Pre-Settlement Loans Can Impact Lawsuit Outcomes
Pre-settlement funding can change the entire power balance in personal injury lawsuits. If you have a strong case but feel pressured to settle quickly because your savings are dwindling, a legal loan may be a game-changer. Talk to your lawyer to decide whether a pre-settlement loan may help you in the following ways.
Give Your Lawyer More Time To Build a Stronger Case
Gathering conclusive proof and collecting witness statements may take a long time. Moreover, months may pass until you reach maximum medical improvement (MMI) — that is, until your condition stabilizes and you have a clearer picture of your recovery prospects. Pre-settlement funding may give you and your lawyer more time to work on your case and present watertight documentation.
Help You Make Decisions With Less Financial Stress
You may believe that more time and longer negotiations could help you resolve your case with a better outcome. However, thinking long-term can be difficult when you need money right now but the at-fault side offers an immediate, although much lower, settlement than you hoped for. Pre-settlement funding gives you time to evaluate an offer properly and decide whether it reflects your case’s value.
Give You Extra Leverage in Negotiations
When the defendant understands you’re ready to take the case to trial, they’re likelier to make you a better proposal. It’s always better to negotiate from a position of strength. You may even be able to have your case resolved earlier if the other side sees that you’ll only accept a fair and reasonable offer.
Using Pre-Settlement Funds
Per the American Legal Finance Association, over 60% of pre-settlement funds go toward preventing eviction or foreclosure. This illustrates the financial crises accident survivors and their families often face because of mounting bills and lack of income.
However, legal funding isn’t only for financial emergencies. You can use these funds to cover ongoing medical care, therapy, living costs, car repair, and any other essential expenses. A legal loan can serve as a buffer that prevents you from going into debt and lets you keep some of your savings.
Apply for Pre-Settlement Funding Today
Are you facing a lengthy personal injury claim or lawsuit? Not sure how to cover your expenses until your case settles? With our quick pre-settlement funding approval process, you may access a cash advance within 24 hours if you qualify. Contact us at Apex Legal Funding to learn about fast, risk-free legal funding options.
FAQ
Is pre-settlement funding a loan?
Not in the usual sense. You must repay a traditional loan at the end of the term or risk dire consequences like losing collateral and damage to your credit score. In contrast, legal funding is usually non-recourse, meaning you only need to pay it back if and when your case settles.
Does pre-settlement funding depend on or influence my credit score?
No. The legal funding provider will weigh your application based solely on the strength of your case. If you have a solid claim, you may qualify for pre-settlement funding even with a poor credit history. Moreover, a pre-settlement loan won’t impact your credit score.
How much may I collect in pre-settlement funding?
The amount of pre-settlement funding you may be eligible for depends on the value of your case. Funding providers will usually forward 10% to 20% of your estimated prospective settlement. Some providers set a limit on the maximum available funding amount.
What are the interest rates on pre-settlement funding?
On average, you can expect to pay 2%-3% in interest per month, or about 40% a year. However, the interest rates may vary on a case-by-case basis. The funding provider is likelier to offer a lower interest rate if you have a high-value case with a strong probability of success.
