If you’re seeking financial help while in the middle of a lawsuit, you’ve probably heard of settlement funding, but it’s important to understand that there are two types of funding: pre-settlement funding and post-settlement funding.
Pre-settlement funding is money awarded to plaintiffs in lawsuits that are awaiting settlement in or out of court. In simple terms, it is a cash advance taken against the eventual winnings of your case. The settlement funding company, not you, takes the risk in awarding you this type of money, because you will not have to repay these funds, even if you lose your case.
Post-settlement funding, on the other hand, is a type of funding given to individuals who have already been awarded a settlement, but have yet to receive any money. Because it can take months to get cash after a case settles, this type of funding is ideal for anyone who needs to pay their bills in between the conclusion of their case and the receipt of their award.
In both scenarios, you as the plaintiff will not need to repay this money. Rather, it will be repaid from your final settlement.
There are a few things that can cause the delay in the time it takes for a settlement to be paid out to a plaintiff:
- A judge’s formal approval of the settlement
- The number of plaintiffs in the case
- The size of the settlement/ratification of the terms of the payout
- Paying attorney’s fees
- Typing up any loose ends, like investigating and clearing any liens
Another matter is the possibility that the defense might appeal the court’s decision and try to continue the case at another level. If this happens, then the settlement will be delayed further—months or even years. After going through the long and tedious process of the first lawsuit, a person may have to wait even longer to get paid, even though they won.
Here are the primary differences between pre-and post-settlement funding:
- Pre-settlement funding is an advance against a pending litigation and tends to be more expensive because of the increased risk on the part of the funding company.
- Post-settlement funding is also a cash advance, but against the forthcoming award money from a case that has already settled. This type of funding is less risky for the funding company because the case has already been won.
- With post-settlement funding, there is no estimation of a potential settlement as with pre-settlement funding. The court has approved a dollar figure to be awarded to the plaintiff. Post-settlement companies essentially purchase either a part or all of the settlement proceeds.
If you’re involved in a lawsuit and need cash fast, call Resolution Funding. Completion of a simple application is all it takes to start the process. Remember: neither type of settlement funding is a loan. We’re advancing you money based on the strength of your case (or the fact that you’ve already been awarded a settlement). We take the risk, while you can get the cash you need to pay your bills and keep living your life. Call us to learn more about what type of funding is available to you today at 855-LAW-ADVANCE.