Lawsuits often put the parties in financial trouble. Money or funds is always the issue which makes it more difficult for the parties concerned. Good thing pre-settlement funding comes into the picture. Pre-settlement funding is a way wherein a person with pending legal case can get funding in the form of loan from a pre-settlement funding company on the basis of his pending case.
However, pre settlement funding is not for everyone. There are requirements that should be met before the loan is granted or the advance is considered. Determination of eligibility for funding is on a case-to-case basis. This is further explained based on the following:
Plaintiff –The plaintiff is the one suing in a case. The plaintiff in a civil lawsuit is the one who can apply for pre-settlement loan and not the defendant. This is because the defendants do not receive money from a legal action. More often than not, defendants do not have additional means to pay for the loan. The award for damages in a civil lawsuit is monetary and once the plaintiff receives the payment, he can pay back his loan with the pre-settlement company.
Favorable Case – It doesn’t mean that if you sue someone, you will always win the case. There are many factors to be considered before the judge decides on the case. It has to be determined whether the defendant is really liable. If the pre-settlement funding company finds that the plaintiff doesn’t have a good chance in winning the case, they will not grant the loan. This is because most pre-settlement companies do not require the money to be paid back in case the plaintiff doesn’t win the case. Favorable cases are personal injury suits, class-action suits and discrimination. Research and information help the funding company determine the eligibility of a person for the pre-settlement fund.
Settlement – Not all cases go to trial. There are times when the two parties reach an agreement before the trial period begins. This is called a settlement. Compromise agreements or settlement is legally binding and is final and executory. The defendant pays the plaintiff a certain amount usually lower than what the plaintiff is demanding. Some parties agree to just settle the case in order to save from further legal fees and expenses. Settlement reduces the amount each party could spend when the case goes to trial.
Insurance Involved – Pre-settlement financing companies usually considers the loan if an insurance company is involved on behalf of the defendant. The reason for this is that insurance companies are more willing to settle even when the defendant is not. Involvement of insurance company also assures that the plaintiff that will be paid with money rewarded to him. If a company being sued has no insurance, there is a good chance that the plaintiff will not be paid as the usual case is that the defendant cannot afford the amount of verdict damages.
Once the pre settlement funding company determines the eligibility of the applicant for a loan, funding is usually released within 24 hours. There are pre-settlement funding companies like AM Legal Funding who approves 4 out of 5 loan applicants and sends you the money the next morning through your bank account.
