When you’re involved in a personal injury claim, your finances are just as much at risk as your health. Insurance companies may prolong the claims process, which can increase financial pressure on claimants and lead some to accept lower settlements simply to make ends meet. That’s where pre-settlement funding can come into play.
Apex Legal Funding, LLC, is a New York-based provider of pre-settlement funding solutions, helping claimants manage financial challenges during ongoing legal claims. Here, we explain how pre-settlement loan companies in New York fit into the broader landscape of insurance negotiations and legal strategy and can help you better navigate insurance company tactics and avoid financial distress during legal proceedings.
How Insurance Companies Leverage Financial Pressure
Insurance companies are in the business of minimizing payouts. One of the more common tactics they use is to delay negotiations, medical reviews, and even court proceedings. This might take the form of repeated requests for documentation, prolonged investigations, or delayed communication about the status of the claim or the need to submit additional information.
Delays in the claims process can increase financial strain on injured victims, which may lead some to accept early settlement offers to ease immediate burdens. The average civil lawsuit involving personal injury can take anywhere from 1.5 to three years to resolve, and during that time, claimants may be facing:
- Mounting medical bills
- Rehabilitation costs
- Lost wages
- Transportation costs
- Daily living expenses
Insurers know that many people can’t wait years for compensation and may use that leverage to push for early, reduced settlement offers. Waiting weeks or even months for an answer and payments causes significant stress, which can ultimately affect your decision making.
The Role of Pre-Settlement Funding
Pre-settlement funding is designed to relieve financial pressure, which may allow claimants to continue the legal process without feeling compelled to settle prematurely. When the insurer continues to dispute the extent of your injuries, challenge your impairment rating, or put you under surveillance, these payments (also called a lawsuit loan) provide a portion of the expected settlement before the case concludes.
It’s not technically a loan in the traditional sense. It’s non-recourse funding that you don’t have to repay if you lose your case. If you do win the case, you’ll repay the loan from the settlement.
The Strategic Advantage of Legal Funding
Pre-settlement funding does more than just help with bills. It levels the playing field. According to the U.S. Department of Justice and other legal research, approximately 95% of personal injury cases settle out of court, so the more leverage you have, the better.
When you’re not desperate for cash, you can give your attorney time to properly negotiate or take your case to trial if necessary. According to research conducted by legal information site Nolo, settlements are, on average, three times higher when claimants have an attorney. However, even with representation, claims take time, and the longer the case drags out, the more it can impact your financial situation.
The Journal of Surgical Research reports that one in eight households with a family member who experiences a traumatic injury faces financial hardship, primarily due to lost income and catastrophic medical expenses. Litigation financing may offer a financial buffer that can reduce the urgency to settle and allow more time for your case to progress.
Common Misconceptions About Getting Help From Lawsuit Funding Companies in New York
Despite its benefits, many people misunderstand how lawsuit funding companies in New York can help. Here are a few facts about these loans:
Myth: “I can get the entire amount of the projected settlement up front.”
Most lawsuit funding companies in New York typically pay 10% to 20% of the expected settlement amount.
Myth: “It’s a loan I’ll be stuck paying off.”
Because this is typically non-recourse funding, repayment is only required if your case results in a settlement or favorable outcome, as outlined in your agreement.
Myth: “It will affect my credit score.”
These advances don’t involve credit checks or show up on your credit report.
Myth: “This is an interest-free loan.”
The average interest rate on these advances is 15% to 20%.
Myth: “My attorney has to approve.”
While your attorney can be involved in the process, they don’t have to be, and reputable funding companies won’t proceed without your consent if your attorney reaches out.
Consider a Settlement Advance While You Navigate Insurance Claims
Managing financial challenges during a complex insurance claim can be difficult, especially when resolution takes months or even years. If you’re feeling the squeeze from mounting bills while your case drags on, Apex Legal Funding, LLC, works closely with New York claimants and law firms to deliver fast, fair settlement advance solutions.
Pre-settlement funding helps individuals like you stay financially afloat while preserving their legal rights. Litigation financing from the most reputable pre-settlement funding companies may help alleviate financial pressure during prolonged negotiations, potentially giving claimants more time to evaluate offers.
Apex Legal Funding, LLC, works with individuals and attorneys to explore financial options during pending litigation. Contact us at 1-800-377-4934 to learn more about the benefits of pre-settlement lawsuit funding and how we can help you stay financially secure while your case unfolds.
FAQs
What Is Pre-Settlement Funding?
It is a type of legal funding that provides injured claimants with access to a portion of their future settlement funds before the case is resolved. Repayment comes from your final settlement, with no monthly payments or out-of-pocket costs.
How Does Pre-Settlement Funding Work?
After you apply, the lawsuit funding company reviews your case with your attorney. If approved, you’ll receive a legal cash advance, usually within two business days.
Is a Lawsuit Loan the Same Thing?
While often referred to as a lawsuit loan, this type of funding is not a traditional loan but rather a non-recourse advance. That means there’s no repayment if you lose your case.
Who Qualifies for This Kind of Funding?
Most individuals with an active personal injury claim and legal representation may qualify. Eligibility depends on the strength of your case, not your credit score or income history.