What is Pre-Settlement Funding?

Pre-settlement funding can ease the strain on your pocketbook while you wait for a lawsuit to settle.

Even with strong cases, processing a lawsuit takes time. A personal injury litigation can go on for months and sometimes years. In the meantime, you’re still responsible for bills and managing a household, in addition to paying lawyers fees. If your injury prevents you from working, you may also be missing an income during this time. Pre-settlement funding — also referred to as a lawsuit or litigation advance — is a way to receive immediate cash for structured settlement payments pending the outcome of a legal action.

CBC Settlement Funding is happy to work with clients in a variety of lawsuits. We find our clients most commonly are encountering legal cases surrounding:

  • Motor vehicle accidents
  • Personal injury
  • Product liability
  • Defective drugs
  • Defective medical devices
  • Medical malpractice
  • Premises liability
  • Worker injury and workers compensation
  • Wrongful death

Should you decide to pursue pre-settlement funding, the process is simple:

  1. The pre-settling funding company you choose to work with will coordinate with your attorney to review your case.
  2. The pre-settlement funding company will submit a written agreement to purchase some of your settlement in exchange for an up-front payment to you.
  3. You sign the agreement with your lawyer.
  4. The company delivers the funds to your attorney’s office, who in turn will give you the payment.

Is Pre-Settlement Funding Right for Me?

Pursuing pre-settlement funding may not be the best choice for everyone. Before you make this decision, ask yourself some important questions:

  • Does my attorney agree with my decision to pursue pre-settlement funding?
  • What are the online reviews for the company I’m considering working with?
  • Is my case “high risk”? This may affect fees.
  • Am I able to secure funds in other ways, such as a private loan?

The Pros of Lawsuit Advances

Lawsuit settlements are valuable assets. If you need cash now to meet immediate financial needs, you may be eligible to receive a cash advance of up to $30,000 against your future structured settlement payments. If the case is settled in your favor, CBC Settlement Funding as the funder will reclaim this money, along with a fee for our services.

CBC Settlement Funding assumes a certain amount of risk in this type of transaction. A pre-lawsuit settlement transaction is classified as a “non-recourse arrangement.” This means if you are unsuccessful in your lawsuit, you do not have to pay back the cash advance and CBC Settlement Funding loses the lawsuit cash advance we paid you.

Some pre-settlement funding companies appear to offer the same benefits, but with strings attached. When you decide on a pre-settlement funding company, make sure to consider:

  • How significant their fees are
  • If their rates are capped
  • If they require you to contribute to the funding up-front
  • If they offer negotiation assistance in the case you are awarded a settlement that’s significantly less than expected

Other Alternatives

Depending on the nature of your lawsuit and individual circumstances, you may wish to look into other alternatives before deciding on a pre-settlement funding arrangement. Seek counsel from your attorney to discuss options that best suit your financial situation. Our staff at CBC can arrange pre-settlement funding within 3 – 5 business days if you choose this option. If for some reason you do not win your case, you will not have to pay back the money.

Pre-Settlement Funding: Frequently Asked Questions

What’s the Difference Between A Lawsuit Cash Advance and Payday Loan?

There is a significant difference between a litigation cash advance and a payday loan. If you have ever dealt with a payday lender, you were required to provide a social security number and other employment information. This way, the payday lender can collect its share directly the next time your employer pays you.

You will not have to provide this information when you apply for a cash advance because it is non-recourse. When a judge rules in favor of the defendant, the plaintiff is not required to repay the advance, and the structured settlement company providing the funding must bear the loss.

How Much are CBC Settlement Funding’s Pre-Settlement Fees?

CBC Settlement Funding does take on risk offering pre-settlement funding, and incurs a cost to provide these funds to our clients ahead of time. To cover these costs, CBC Settlement Funding charges nominal fees after a settlement is awarded. We do not believe in hidden fees. Our rates vary from case to case depending on the amount of funds you are requesting and how long it may take for the case to resolve. For a complete estimate tailored to your case, please contact a representative from CBC Settlement Funding.

What Do I Need To Know About Pre-Settlement Funding?

There Are No Out-of-Pocket Expenses – You do not have to pay anything upfront. The accumulated funding fees are paid to us from your settlement.

There is No Risk – Unlike loans that must be repaid, a lawsuit advance provider doesn’t get paid if there is no settlement. CBC Settlement Funding assumes all the risk and will only receive money if the case is settled.

Pre-Settlement is Not for Legal Fees – Most legal expenses are paid on a contingency basis once your settlement is made. Use your pre-settlement funding money to pay household bills, credit card balances and other expenses. For clients who are facing foreclosure, the advance can help them remain in their home.

No Case Involvement – We do not get involved in your case. CBC will only verify with your lawyer the details of your case to determine if you’re a candidate for pre-settlement funding.

No Credit Checks – As opposed to banks, CBC Settlement Funding does not check your credit as a part of our approval process.

What If I Don’t Win My Lawsuit?

If you do not win your lawsuit, you pay nothing, and CBC Settlement Funding absorbs the expense as a loss. Unlike payday loans, secured loans and cash advances, a litigation cash advance is a “non-recourse” arrangement. This means when CBC Settlement Funding provides you with cash for settlement payments against a pending court award, our company assumes the risk the judge may decide in favor of the defendant.

How Do I Pay Back The Money From A Settlement Cash Advance?

If you have applied for and received a settlement cash advance from CBC Settlement Funding, you will repay the advance from your court award or settlement, along with any additional fees. Repayment only occurs if your lawsuit is successful.

CBC Settlement Funding Provides Pre-settlement Funding

CBC Settlement Funding can provide you with a cash advance against your future settlement payments. Contact us today for more information on customized cash options to fit your financial needs.