Serious car accidents can impact all areas of your life: physical, emotional, social, and financial. While an insurance claim may cover the consequences of a minor collision, a major injury could require you to file a lawsuit against the at-fault party.
A car accident lawsuit can help you seek compensation for medical treatments, vehicle repairs, and lost time at work. Unfortunately, it could take months or years before your case concludes. How do you pay your bills in the meantime? One option for plaintiffs needing financial assistance is car accident lawsuit funding.
This post covers what you need to know about car accident pre-settlement funding in NYC.
What Is Car Accident Lawsuit Funding?
Car accident lawsuit funding is a cash advance on your pending lawsuit. When you apply, the funding company will evaluate the merits of your case. If you meet their approval requirements, they will advance you a percentage (typically 10% to 20%) of your expected settlement.
You may hear lawsuit funding referred to as litigation financing, legal funding, and plaintiff funding. Some people also use the terms lawsuit loans, legal loans, and pre-settlement loans. However, legal funding is not a loan in the traditional sense.
Instead, it is a non-recourse advance on your pending settlement, which means you owe nothing if your claim doesn’t succeed. This contrasts it with more traditional financing like bank loans, where you risk losing collateral and damaging your credit if you don’t pay back what you owe.
Do You Need Legal Funding?
Your financial and legal situation determines whether litigation financing makes sense. If you have substantial assets and expect a quick resolution of your claim, you might not need pre-settlement funding. However, it may be beneficial in the following situations:
- You have limited financial resources to cover your expenses.
- You are having trouble paying for necessary medical treatments.
- You are in danger of defaulting on car loans, mortgages, or other obligations.
- You have been out of work for weeks or months due to the accident.
- Your attorney doesn’t expect your case to be resolved quickly.
- You don’t want to deplete your savings or sell assets to pay your bills.
- You have poor credit, no collateral, or prefer not to take out a loan.
Another important aspect of legal funding is its potential effect on filing auto accident lawsuits. If your daily expenses are covered, you and your attorney have more time to build a strong case and hold out for a better offer during settlement negotiations.
What Are Lawsuit Funding Approval Requirements?
Unlike a bank loan, car accident lawsuit funding does not depend on your income or credit score. Instead, pre-settlement funding criteria include the following:
- You must have sustained an injury or damages that are compensable.
- You must have an attorney actively working on your case.
- Your attorney must work on a contingency fee basis, meaning they charge a percentage of your eventual settlement.
- Your case must have strong merits and evidence against another party, such as a trucking company or the driver of another vehicle.
- You must be a resident of the state where you request lawsuit funding.
To determine whether or not you qualify, the legal lender will evaluate the details of the car accident and the strength of your case. If they believe you have a potentially valuable claim, they may offer you a settlement advance.
What Determines Lawsuit Funding Amounts?
You won’t know exactly how much funding you qualify for without going through the application process. Once you apply, the lender will work with you and your attorney to determine the appropriate amount of litigation financing.
When deciding how much to offer plaintiffs, funding companies look at the following factors:
- Damages sustained: How severe and costly were your injuries? How long were you out of work? What are your estimated future medical bills and lost wages?
- Insurance coverage: Does the defendant have an insurance policy? What is the limit of available coverage?
- Case strength: Who was at fault in the accident? How strong is the evidence against them?
- Case length: Is this a simple car accident claim anticipated to be resolved quickly, or is it a complicated case that could have an extended timeline?
- Legal jurisdiction: Which court has authority over your case? What laws apply?
For example, if the at-fault driver has a low policy limit or you were partly to blame for the accident, your settlement may be smaller. On the other hand, if you have strong evidence of negligence against a well-insured defendant, your settlement may be larger.
How Does the Legal Funding Process Work?
The process is simpler and quicker than you might expect. If you and your attorney decide litigation financing makes sense in your case, you will follow these steps:
- Application: Fill out the application with your chosen lender. You typically must supply your personal information, your lawyer’s contact information, and basic case details.
- Evaluation: The lender will request and review evidence of your claim — such as medical records, proof of insurance, and professional testimony — to determine your likelihood of winning and the potential value of your case.
- Approval: Not all lawsuits receive funding approval, but many lenders will notify you of their decision within 24 to 48 hours.
- Contract: Upon approval, the lender sends an agreement for you and your attorney to sign. This document explains the interest rates, payment schedule, and terms and conditions of your pre-settlement funding.
- Funding: Once you have signed the agreement, the lender will disburse the funds. This generally happens quickly, often as soon as 24 hours.
See If You Qualify for Car Accident Lawsuit Funding Today
Whether you need help choosing the right car accident lawsuit loan or are ready to apply for litigation financing today, contact Apex Legal Funding, LLC. We offer financial solutions to plaintiffs waiting for their lawsuits to resolve. We won’t check your credit, ask for collateral, or require monthly repayments.
Call 1-800-377-4934 to see if legal funding is right for you!
