Lawsuit Settlement Funding: What It Is and How to Get It—Fast



Lawsuit settlement funding, or settlement loans or lawsuit cash advance, as it is more commonly called, is a process by which litigants—and sometimes even law firms—fund their legal costs for a lawsuit by means of third-party funding. These funding companies advance cash amounts to a litigant in exchange for a portion of the settlement expected from a lawsuit. In the event the litigant loses the case, the third-party funding agency gets nothing, not even to recover the equivalent of their investment; the litigant will not need to pay back the amount of legal funding received.


It is a common occurrence for litigants to find themselves in financial constraints when involved in a lawsuit. Very few can really afford to be involved in one, especially that which is drawn out over a long period. But it is possible for these litigants to borrow funds against proceeds they might receive from the lawsuit.


This process of litigation funding is most commonly seen in personal injury cases all around United States common law jurisdictions, although some other types of cases are also eligible for such lawsuit loans or funding solutions.


Mainly, third-party funding organizations assess a case after a lawsuit funding applicant submits a request or application for a legal loan. Many of these companies go for commercial disputes, vehicular accident lawsuits, wrongful termination, construction accidents, workers’ compensation, dog bite, sexual harassment, anti-trust, legal malpractice, breach of contract, and discrimination cases, and even civil rights, labor law, and class action suits, among others.


Applying is a matter of one, two, three, sometimes four, steps.


First, the funding agency gets in touch with the attorney representing the litigant in order to look over pertinent documents related to the case. For more details about secured loans, visit


Second, a litigant is assigned to a lawsuit funding specialist who is familiar to the type of case brought up.


Third, the specialist assesses the merits of the case to decide its funding approval and the interest rate. In many cases, it would take one day to process the application. Know more about the law cash.


Fourth, a litigant is appraised of the case review results and the rate offered and decides whether to go on with the application. Once the litigant is decided and signs the contract, the fund release is arranged as soon as possible.


At the point where the litigant considers whether to go on with the loan, it is the best time to really think about how wise the decision can be. While litigation funding can help tide one over when money is tight from the expenses of litigation compounding bills and other living costs, it may also be very expensive, considering that many cases can take some time before going to trial or reaching settlement. In that time, the interest may already run as high as 60% after a year.


It is really important to weigh the pros and cons of going into lawsuit funding. It is true that, with proceeds from the loan, more time is gained to go over settlement offers and negotiate a fair one. But it is not all the time that third-party funding companies approve a loan or even accept it for consideration. Not all cases may qualify or the company may not feel the chances of winning are high. So it could also take a while to actually find one willing to provide funding and be sure that the company is a reputable one.


So, while going for litigation funding may have advantages, it also has its disadvantages. Be sure to find out everything about it as well as the company and understand fully what it takes to get—and pay back—a lawsuit loan.

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