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What is a Lawsuit Loan and Who is Eligible for One



What is a Lawsuit Loan and Who is Eligible for One

If you find yourself in court and expect a settlement, then you may want to consider pre-settlement funding or a lawsuit loan. Once you file a lawsuit, there are companies such as Money First Lending that will provide you with an advance based on the amount of the settlement you expect to receive.

It is basically a cash advance in a legal case that is pending rather than an actual loan. These cash advances are available to plaintiffs who file various lawsuits, including:

• Accident

Wrongful death

• Personal injury

• Product liability

• Medical malpractice

Various terminology is used to describe this type of funding. It is often referred to as a lawsuit advance, lawsuit loan, lawsuit funding or pre-settlement advance. The amount is based upon the amount of money you expect to receive as part of your settlement. So why take out such a loan?

Benefits of Lawsuit Loans

When plaintiffs are waiting for the judge to hand down a decision, money can be hard to come by, especially if injured and unable to work. These loans can provide welcome relief in the form of financial assistance to provide food, shelter, and other necessities while you are going through the legal process.

Being financially secure also makes it less likely you will accept a low ball offer just to get the case over with. No two cases are alike, but in almost every case, a lawsuit loan can provide you with the time you need to negotiate a favorable settlement.

Battling Big Insurance

It goes without saying the insurance company for the defendant will do everything in their power to reduce the amount of your settlement. Insurers can smell desperation, so they may offer you a paltry amount while knowing full well you’re entitled to much more. Simply having funds allows you to hold them off.

Most injury cases settle out of court. As you get closer to trial and are able to reject the defendant’s first settlement offer, it becomes more likely you’ll be offered a handsome settlement so the defense can avoid a costly trial.


To qualify, you must first have a lawsuit in process. The initial step will be hiring a lawyer who files suit in court on your behalf. Many lawyers work on a contingency fee basis and agree to collect a percentage of the settlement once the case is over. These legal fees are customarily between 20% and 40% of the settlement and will be deferred until after the trial or mediation period.

The lawyer will put the details together so the representative at the lawsuit loan company can assess a realistic settlement amount, which they will use to determine how much financial assistance they are able to offer you. Most loan professionals use a formula to calculate a certain percentage of your expected windfall based on similar cases and the facts pertaining to your individual circumstances.

Getting Paid

The time it takes to receive your settlement depends upon whether the defendant’s insurance company or the at-fault party themselves will be paying. This also calls into question the financial position of the defendant and their ability to pay, as well as the negotiated terms.

There is a lot of uncertainty around the length of time it takes to receive a settlement. But that is just another reason why a pre-settlement loan is a good idea, so you can stay solvent while your lawsuit is still pending.

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