A common misconception is the speed at which even a slam-dunk case will proceed. A simple, straightforward case with few complications can still take months, if not years, to settle. Meanwhile, your creditors will not be patient. Your forced holiday from working and earning a living does not automatically grant you a holiday from your liabilities.
That’s where pre-settlement funding has helped a lot of plaintiffs survive the wait. Pre-settlement legal funding is a cash advance – not a loan per se – taken against the settlement your case is expected to generate. The interest rate is usually higher than that of a bank, given the risk the funding provider is taking.
The risk for the provider, rests with the possibility the funding will not be repaid. Pre-settlement funding assumes a settlement – the advance is repaid, along with accrued interest, from the settlement dollars when they come in. If there is no settlement, neither the advance nor accrued interest is repaid.