Can I Get My Settlement Check Early?

Individuals awaiting resolution for personal injury or other claims often face financial pressures due to lengthy legal processes. Ongoing expenses continue while income may be disrupted. Understanding options to bridge this financial gap before a case concludes can provide stability. This article explores mechanisms offering early access to funds, helping claimants manage obligations while their legal cases proceed.

Understanding Pre-Settlement Funding

Accessing funds before a lawsuit concludes involves pre-settlement funding, also known as legal funding or a lawsuit cash advance. This arrangement provides money to plaintiffs in exchange for a portion of their future settlement. It functions as a non-recourse cash advance, meaning repayment is contingent upon a successful case outcome. If the plaintiff does not win or settle, they do not owe the funding company anything.

Pre-settlement funding differs from a traditional loan as it does not require monthly payments or impact credit scores. Approval is based on the legal claim’s merits and potential value, not the applicant’s credit history or employment. This provides financial security, as the funding company assumes the case’s risk.

Cases commonly eligible for pre-settlement funding include personal injury claims such as car accidents, slip and fall incidents, and medical malpractice. Other eligible cases extend to wrongful death lawsuits, employment disputes, and certain commercial litigation. A case’s suitability for funding depends on its strength and likelihood of a favorable resolution.

The Application Process

Requesting pre-settlement funding begins with an inquiry to a funding company, often online or by phone. The interested party provides basic information about their legal claim. This contact allows for a more detailed case evaluation.

Following the inquiry, the funding company gathers specific information from the applicant and their attorney. This includes details about the case type, injuries or damages sustained, and legal arguments. The attorney’s contact information and consent to review case documents are essential.

The funding company assesses the case’s strength and potential value through a comprehensive document review. This involves examining legal materials like police reports, medical records, and attorney notes. Underwriters analyze these documents to determine the likelihood of a successful outcome and estimated settlement amount.

The attorney’s involvement is important throughout this process. Funding companies communicate directly with legal counsel to verify case details and obtain documentation. Attorney cooperation helps ensure funding terms align with client interests and ethical guidelines. If the case is strong, the funding company presents a funding agreement outlining the advance amount and associated costs.

How Funds Are Disbursed and Repaid

Once a pre-settlement funding agreement is finalized, disbursement typically proceeds quickly. Funds are commonly delivered via direct deposit, wire transfer, or check. Many companies disburse funds within 24 to 48 hours of approval, providing rapid financial relief. This allows plaintiffs to address immediate financial needs.

When the legal case settles or a judgment is awarded, the attorney receives the settlement funds. The attorney then directly repays the funding company from the gross settlement amount, covering the original advance plus any agreed-upon fees. This arrangement ensures the funding company is repaid only if the case is successful.

If the case is lost and no settlement or award is received, the applicant has no obligation to repay the funding company. The funding company assumes this risk, distinguishing it from traditional loans. The pre-settlement funding amount and associated costs are deducted from the gross settlement, and the client receives the remaining net amount after financial obligations are satisfied.

Costs and Financial Implications

Pre-settlement funding involves specific costs distinct from traditional loan interest. These fees are often structured as a flat fee or a periodic, monthly, compounding rate. Monthly rates can range from 2% to 4%. These charges accumulate over the case’s duration, influencing the total amount to be repaid from the final settlement.

The method of fee accrual significantly impacts the total cost. Compounding rates can lead to a substantial increase in repayment over time, especially in lengthy cases. Some companies offer simple interest or flat fees, which can result in more predictable and potentially lower overall costs. Some providers might also charge application, processing, or administrative fees, which can further reduce the net amount received.

These accumulated costs reduce the final amount a plaintiff receives from their settlement. The original advance and all accrued fees are subtracted from the gross settlement amount. Applicants must understand all terms and costs, including any caps on repayment, before signing a funding agreement. Transparency regarding the fee structure is essential for an informed decision.