Common Types of Lawsuit Funding

Common Types of Lawsuit Funding

Common Types of Lawsuit Funding


Litigation can be expensive and time-consuming. Depending on how long the lawsuit drags on, you could face tough financial straits. Court and attorney fees may top the list of what you may have to bear during the period.

The type of litigation will determine how much it will cost. An automobile lawsuit, for example, can run anywhere from $43,000. Employment litigation costs up to $88,000. Malpractice goes up to hundreds of thousands.

But, other costs may crop up as well. Medical fees can, for example, come up due to the stress of the trial. You may have to make restitution to the plaintiff if you’re on the other side of the lawsuit. And to top it all off, there are the never-ending daily bills you must take care of.

In some instances, the money you have available for litigation runs out. In this case, you can look to other sources of lawsuit funding, as we will share.

Lawsuit Loans

Lawsuit loans provide cash advances on anticipated settlements. The lender will recover his money by taking a part of your money. You may also find references to such cash advances as per settlement loans or legal funding.

So what happens in the case that you do not win the litigation? Well, the lawsuit loan falls under non-recourse funding. That means the outcome of the case is the collateral. If you do not win, the lender does not get back any money.

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Please take time to shop around for the right lender. They should be transparent so that you know what to expect. Also, have clarity on the rates and avoid lawyers that work on compounding interest.

Some of the best lenders can avail of same-day accident loans. That means in less than 24 hours, you will have access to the cash.

Lawsuit loans also have another advantage. They will not impact your credit score. This is because you do not make monthly balance repayments.

The scope of lawsuit loan coverage is also broad. These include personal injury loans, premise liability, medical malpractice, and car accident loans.

  • Lawsuit loans are a viable option in the following scenarios:-
  • You can prove that the accident was the defendant’s fault, not yours
  • You have a lawyer handling the litigation
  • The litigation process is taking too long to settle
  • It has become difficult to keep up with financial obligations. Your debt portfolio is also becoming unmanageable. Despite the name loan, the pre-settlement funding is far from that. As we stated, payment depends on the outcome of the case.

The lawsuit loan lenders will work with the attorney. If you have any questions or need clarity, speak to your lawyer. They should be able to advise you on the best way to go about applying for legal loans.

What You Need To Know About Lawsuit Loans

By now, you know that pre-settlement lawsuit loans are a lifesaver during litigation. Further, you don’t have the financial burden of adding another loan to your portfolio. But, do note the following when shopping around for lenders.

  • Compare rates from several lawsuit loan companies. Please pay attention to their fee structure. Some will take a considerable chunk of your settlement amount.
  • The legal funding company may charge an upfront fee to cover their costs. Anything above 10% of the cash advance is excessive.
  • Avoid compound interest because it will make the lawsuit loan too expensive.
  • If possible, work with the lawsuit loan lending company. Going through brokers means you must take care of their fees as well.
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Let’s now delve into the different lawsuit cash advances below.

Lawsuit Funding and Cash Advances You Can Get


1. Personal Injury Lawsuit Funding

You get into an accident that results in physical injury. The other party is responsible, meaning they are at fault. You are now in the litigation process and confident of a good outcome. Look for a cash advance by applying for a personal injury lawsuit loan.

2. Dangerous Drugs or Pharmaceutical Litigation Loans

Your doctor prescribes a specific medication. But, after taking the drugs, you suffer some injury. If you can prove that you were unaware of the risks of taking the medication, you can sue for product liability.

 You can also apply for the dangerous drugs of pharmaceutical litigation pre-settlement loans. This will help you manage financial needs during the litigation.

3. Car Accident Lawsuit Loans

The reasons for car accidents are many. It could be due to aggressive driving, distracted driving, fender benders, and DUIs. As the plaintiff, you can sue for expenses arising from injury due to the accident. It could be for medical bills, loss of income, or even prescription drugs.

The car accident loan company will avail a cash advance. It will help tide you over as you await the outcome of the litigation.

So what happens if you are a passenger or pedestrian and sustain an injury during an accident? Well, you can also sue for a passenger or pedestrian injury claim. The pre-settlement loan can provide financial relief during a court case.

4. Medical Malpractice Lawsuit Funding

Medical professionals are not above making some serious mistakes. An injury can result due to negligence on the professional’s part. If this applies to you, it is possible to sue. But there must be proof of a patient-doctor relationship.

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Further, you must prove that the doctor was negligent. And that the injury is a direct result of their actions. Such cases are quite complex and can take a very long time. But, there are loan companies that can avail pre-settlement funding to plaintiffs.

Final Thoughts

Lawsuit funding can give you some breathing space. Litigation can take a long time and can deplete your cash reserves in a very short time. Yet, life and, indeed, daily financial obligations must continue as usual.

When shopping for lenders, the burden is upon you to look for the best. Compare rates and be keen about any fees you must take up. Get information about the lender from customer reviews.

A reputable attorney should help you look at the contracts and guide you on viable options. You could win a significant settlement only to lose a huge chunk to the lawsuit funding company. Yet, simple due diligence on your part could have helped avoid all that.


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