Understanding Settlement Funding

What is Settlement Funding and How Does It Work?

Whether negotiated or awarded by the court, a settlement can allow victims to pay the expenses resulting from the harm they’ve experienced. However, it can take a significant amount of time for some cases to reach a conclusion. Claims involving severe injuries and large payouts are notoriously time-consuming to settle. Unfortunately, some individuals have urgent bills and living expenses and cannot wait until the settlement is awarded.

Settlement funding provides an advance on a pending legal settlement. Recipients of settlement funding can use the money to pay for their rent or mortgage, medical treatments, legal fees, or other expenses they may be facing during this difficult time. Most importantly, it can allow victims to continue pursuing the full compensation they deserve for their injuries without worrying about debt or other financial stressors.

While taking advantage of settlement funding can be very helpful in some situations, it’s essential to fully understand how funding works and carefully consider all your options before making a decision. If you have questions about the application process or whether settlement funding is right for you, contact our knowledgeable staff at Blue Fox Funding, LLC today: 618-350-4581.

What Types of Cases May Qualify for Settlement Funding?

As the name implies, settlement funding is applicable to civil cases where the plaintiff has the potential to recover a financial settlement from the defendant(s). Any cases involving tort law are typically eligible for settlement funding. A tort is an action or failure to act that leads to injury or harm to a victim. Tort law allows the injured party or their surviving loved ones to file a lawsuit to seek relief in the form of a monetary settlement for the losses they’ve suffered from their injury.

Common examples of tort law cases that could be eligible for settlement funding include:

• Car, motorcycle, or truck accidents
• Employment discrimination or wage theft cases
• Medical malpractice
• Personal injury claims
• Premises liability
• Product liability
• Worker’s compensation cases
• Workplace accidents
• Wrongful death claims

Additionally, to apply for settlement funding, you must prove that you have a lawsuit in process for a qualifying case and have hired a lawyer to represent you.

How Much Money Can You Receive?

As every case is different, it isn’t possible to estimate the funding that may be available in your specific situation. However, the funding you receive will represent only a portion of your total expected settlement. In most cases, it will equal between 10% to 20% of your case’s value. State regulations and the standards followed by your chosen financing company will also impact the total amount of funding you are offered.

What Factors Can Impact Your Ability to Get Settlement Funding?

It is key to know that only some cases will qualify for funding. You must apply and provide all necessary information to receive a determination on your funding request. Because the funding company will need to know more about your case’s strength and estimated value, you must supply your lawyer’s contact information. Strong claims that demonstrate a high chance of success in court are most likely to result in a funding offer.

While the details of your case play a significant role in your settlement funding determination, other information, such as your credit report and income, will generally not be checked. For this reason, settlement funding may represent a better option than a traditional loan for individuals who have lower-than-average credit or lack collateral.

How Long Does It Take to Get Your Funds?

The approval process is much quicker because fewer metrics must be checked for settlement funding versus a typical loan. Approved clients can often have their funds within a few days.

You can ensure that your application process is as smooth and fast as possible by taking the following steps:

• Fully fill out your application.
• If contacted by the funding company, provide any requested supporting documents or information promptly.
• Discuss your application with your lawyer beforehand so they know your intentions and are prepared to speak with a funding company representative.

How is Settlement Funding Repaid?

The repayment process for settlement funding is much different than for a traditional loan. You will not need to worry about monthly payments. Instead, your settlement funding will be repaid in a lump sum as soon as you receive your settlement compensation. When you get your settlement funding offer, it will outline any fees or other costs that will also be included in your repayment amount. Ensure you review this document carefully with your lawyer to understand your repayment obligation.

What Happens if You Don’t Win Your Case?

Because settlement funding is provided as a non-recourse loan, the settlement funding company takes on all the risk when they make a loan offer. If your case does not end in a settlement, you will not be required to repay the loan amount.

How Do You Know If Settlement Funding is Right for You?

Settlement funding is one tool available to plaintiffs facing financial challenges, but it may not be suitable for everyone. You should consult with your legal team to review all your options if you are struggling with bills or other expenses while waiting for your case to conclude.

Other possible ways to fill the gap between your current situation and the receipt of your compensation could include:

• Taking out a traditional loan.
• Borrowing money from family.
• Cashing in retirement funds.
• Utilizing medical liens.
• Setting up payment plans for large bills.

If you decide settlement funding is a good fit for your needs, perform your due diligence and work with a trusted company. Blue Fox Funding, LLC is here to answer any questions you may have. Contact us today at (618) 350-4581 to schedule a free funding evaluation.