Pre-Settlement Lawsuit Financing FAQ

  1. What rate can I expect to be charged for my advance on my Lawsuit?
  2. Do I need to make monthly payments on my advance?
  3. My attorney has tried to discourage me from getting an advance…what should I do?
  4. What happens to my advance if I lose my lawsuit?
  5. I was a passenger in a car that was in an accident…how does the insurance and advance work on that type of case when there was a driver and two passengers?
  6. What documents do I or my attorney need to provide to get this advance?
  7. Does the underwriter get involved in my case?
  8. How long does the advance process normally take…when can I get my advance?
  9. Is there a cap on the fees being charged on the advance?
  10. Some Underwriters will cap the fees if the case continues longer than 3 years. Most cases settle in six to eighteen months.
  11. Is there a minimum a case needs to be settled for, in order to get funding?
  12. Is there a maximum on the amount I can get for an advance?
  13. Do Workers’ Comp cases get advance funding?
What rate can I expect to be charged for my advance on my Lawsuit?

The rates in this industry are typically 3% to 5% per month depending on the Risk of the case.  These are NOT Loans but are simply advances on a Potential Settlement.

 

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Do I need to make monthly payments on my advance?

There is no need to make payments – ever. The funding source will get his money back, including the interest on the advance, when the lawsuit settles.

 

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My attorney has tried to discourage me from getting an advance…what should I do?

Your cash flow consultant should be able to address any misgivings your attorney has, so bring your consultant and attorney together. It is essential that the funding source has the cooperation of your attorney, so it is important that he or she is onboard. However, if your attorney remains reluctant, you may have to insist that he participate in the process, and you may also have to play a role in gathering the information and data the funding source requests.  Remember, the Attorney works for you not the other way around….the Attorney needs to do what you ask as long as it is reasonable.

 

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What happens to my advance if I lose my lawsuit?

Nothing. It is still yours. You do not have to repay it.

 

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I was a passenger in a car that was in an accident…how does the insurance and advance work on that type of case when there was a driver and two passengers?

When an Insurance policy covers multiple people it will normally be split up by how seriously each person was injured….i.e., most seriously injured gets a larger share of the Policy Limits.

 

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What documents do I or my attorney need to provide to get this advance?

Each type of case is a little different with the type of documents required.  A good example though is the typical Auto Accident.  The requirements are:

  • Police Report
  • Emergency Room Report
  • Total of Medical Bills to date
  • Copy of Demand letter and Complaint
  • Insurance information including Policy Limits
  • Expert Opinion Report if needed
  • Copy of any Settlement Offer

 

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Does the underwriter get involved in my case?

The Underwriter never gets involved in the case or its outcome…that is left completely in the hands of the Attorney.

 

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How long does the advance process normally take…when can I get my advance?

If you have a strong case and the documents and other data are readily available, you should have your advance in a few days.

 

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Is there a cap on the fees being charged on the advance?

Some Underwriters will cap the fees if the case continues longer than 3 years.  Most cases settle in six to eighteen months.

 

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Some Underwriters will cap the fees if the case continues longer than 3 years. Most cases settle in six to eighteen months.

Underwriters like to see cases seasoned at least six months.  The main reason for this is:

  • It is more likely that the necessary documents will be available
  • If the plaintiff was injured there will be a better understanding of any Life Long support that may be needed and should give any injuries time to heal

 

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Is there a minimum a case needs to be settled for, in order to get funding?

To be worthwhile to the Underwriter, a case needs to be worth at least $20K.

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Is there a maximum on the amount I can get for an advance?

There is no maximum as long as the numbers in the case work.  This means that you first look at the expected settlement and deduct the expenses like the Attorney fees, Hospitals & Doctors, Rehab facilities, etc., and then you will arrive at a number left for the advance plus fees.

 

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Do Workers’ Comp cases get advance funding?

Workers’ Comp Cases can be funded as long as they are 3rd Party Cases.   A good example of this is when let’s say a FEDEX Driver is hit head on and it was not their fault.  The Workers’ Comp process will take care of their Medical and Rehab.  The Driver/Plaintiff from FEDEX can now go after and sue the Driver that hit the FEDEX truck head on….this is called a 3rd party suit.

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