So what’s the difference then, between pre-settlement funding and post-settlement funding? And why is there a need for the latter?

Here’s another misconception: the assumption that when a case settles and the plaintiff wins a settlement, the settlement dollars start flowing right in.

Not necessarily. Like a lot of things in life, it’s not quite that simple. Even when a case settles and you win, there could be delays in the funds landing in your bank account. A judge may need to approve the settlement (which in most cases, is a formality, but even so it could take weeks). There may be need for a holdback of funds to ensure any potential liens are investigated and cleared.

Sometimes, simple red tape can slow the process and delay your settlement longer than you might expect.

Meanwhile, the pre-settlement legal funding agreement ends when your case settles. You still don’t have to pay the advance until your settlement dollars actually come in. But the money coming to you stops, because the settlement has been achieved (if not actually delivered, in terms of funds into your account).

You’re still waiting. In the meantime, you may have recovered enough to get back to work and resume earning an income.