Money is often tight when filing a personal injury claim, especially if your income has also suffered as a result of your damages. Legal funding can be an attractive alternative to help pay your bills during this time. However, an uncooperative attorney may steer you away from pre-settlement funding or refuse to accept it.
Can your lawyer deny you from getting a pre-settlement loan? The simple answer is no; your lawyer can’t stop you from applying for or obtaining a pre-settlement loan. Here’s what you can expect when applying for legal funding and how your lawyer can impact your ability to receive it.
In This Article
- You Must Have a Lawyer to Apply for Legal Funding
- Non-Recourse Legal Funding Means No Risk to You
- Most Lawyers Cooperate With the Pre-Settlement Loan Process
- What If Your Lawyer Refuses to Cooperate?
- How Does a Legal Funding Company Determine Your Pre-Settlement Loan Eligibility?
- What If You Get Denied for a Pre-Settlement Loan?
- How the Pre-Settlement Loan Process Works
- Your Pre-Settlement Loan Amount
- How You Pay Back Your Legal Funding
- If You Lose Your Case
- Apply for a Pre-Settlement Loan Today
You Must Have a Lawyer to Apply for Legal Funding
When you apply for a pre-settlement loan with High Rise Financial, you must have a lawyer representing you. Although you have the right to represent yourself pro se in legal matters like a personal injury lawsuit, doing so will stand in the way of your ability to obtain legal funding.
Your attorney will need to be actively involved throughout the legal financing process. For example, they are responsible for:
- Providing details about your case: The legal funding company companies will require access to the specifics of your claim – both the legal documents and your medical records. Your lawyer must be available and responsive to these requests.
- Dispersing the funds from your settlement: When the defendant in your case eventually turns over the settlement money, it will go to your lawyer, who is then tasked with distributing the funds appropriately.
Reputable legal funding companies only back cases where a plaintiff victory is likely, and the strongest cases are ones where a lawyer is involved. The reason for such stringent qualification requirements? They only recover the funds if you win your case.
To apply for free, call (877) 735-0016
Non-Recourse Legal Funding Means No Risk to You
Legal funding is a form of non-recourse debt. This means the company can only obtain repayment from your settlement, not your personal assets. On the other hand, most traditional loans are recourse debts, which give a lender the right to put a lien on your home, your car, or other assets of value.
With non-recourse financing, the company offering the funds takes on all the risks in the transaction. As a result, you will have the money you need to pay any expenses you choose, and repayment will come directly from your settlement.
Most Lawyers Cooperate With the Pre-Settlement Loan Process
Fortunately, most personal injury lawyers understand the financial challenges their clients face. They know that these cases can take months, if not years, to settle.
While your lawyer may be able to advance funds to cover costs directly associated with your case, including legal fees and expert witness testimony, ethical rules bar them from loaning you money for your personal expenses. However, personal injury lawyers are familiar with pre-settlement loan companies and know that the legal funding they offer can be a lifeline to clients.
Legal funding can give your legal counsel the time they need to negotiate the most decisive settlement. For that reason, your lawyer will likely cooperate with the application process – but if they don’t, you do have options.
What If Your Lawyer Refuses to Cooperate?
Your attorney has an ethical obligation to act as an advocate for your best interests. They can provide you with information and legal advice; however, decisions regarding your lawsuit are ultimately up to you.
If your lawyer insists against pre-settlement funding, they may be doing so because they think it is not in your best interest. Some reasons legal financing may not be a good fit for your case include:
- It is not lawful or enforceable in the state where you live
- You have already taken out the maximum funding amount for your expected settlement
- Your claim is still in the preliminary stages, so it may be too early to apply for financing
If you believe legal funding is the right move for you, but your attorney refuses to cooperate, you may need a new lawyer. Ideally, you should find an attorney you trust who agrees with you on what is best for your situation.
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How Does a Legal Funding Company Determine Your Pre-Settlement Loan Eligibility?
In general, there are two requirements you need to meet to obtain legal funding: you must have a settlement claim and an attorney to represent you. Beyond that, the legal funding company will look at the specifics of your case to find out who is at fault.
In states with no-fault accident laws, it may be challenging to obtain funding if there is any suspicion that you could be found at least partially responsible for your damages.
Unlike personal loans and other forms of financing, pre-settlement loans don’t require a credit check. You also don’t need to put up personal assets for collateral. All that matters for your ability to qualify for legal funding is your settlement and your likelihood of winning.
What If You Get Denied for a Pre-Settlement Loan?
If you’re denied a pre-settlement loan, you may be able to re-apply at a later date. However, it’s possible that your case has not progressed to a point where a company feels safe in taking it on. To reduce their risk exposure, it’s common for a legal funding company to want a court to establish fault before disbursing money.
If at any point you were rejected, you can seek out other legal funding. Likewise, if the company you want to work with doesn’t want to work with you, you can always choose another. There are dozens of legal funding companies you can choose from, and with careful research, you can find the right one for you.
How the Pre-Settlement Loan Process Works
We advise potential applicants to discuss getting a pre-settlement loan with their lawyer before applying. This helps ensure you are both on the same page and expedite the process.
When you fill out the application form, we ask for some basic information, including your name and contact information and your lawyer’s name and contact information. We also ask what state you live in. However, since your pre-settlement loan is tied to your settlement amount rather than your credit rating, we don’t ask for financial information.
Once we have your application, a team member contacts your lawyer to get all relevant documents supporting your case. By applying, you give your lawyer permission to release this information to us. Naturally, we keep it in the highest confidence.
Based on the strength of your case and the severity of your injuries, our underwriting team will determine if we can approve you for a pre-settlement loan. If we can, they will then give us a dollar figure. Our clients typically receive anywhere from $500-$250,000 in pre-settlement legal funding.
Your Pre-Settlement Loan Amount
Your pre-settlement loan amount will depend on your predicted settlement amount. The larger the expected settlement, the more you can usually borrow. However, a responsible legal funding company will only lend you up to 20% of your compensation since more than this entails higher risks to the company and higher fees for you.
Your legal funding can pay many of the costs relating to your claim, including medical bills and living expenses. The money is yours to spend however you need to. And rest assured, if your case drags on or you face unexpected expenses, you can apply for additional legal funding or even a settlement buyout if you’ve already hit your funding limit.
How You Pay Back Your Legal Funding
While legal funding is also called a pre-settlement loan, it’s different from most loans. You won’t have any monthly payments and will only face simple interest in the case of reputable funding companies. Your lawyer will pay your funding back only if you win your case – if you lose, you owe nothing.
This is another part of why your lawyer needs to be involved in the process. When you get a settlement or court award, the money goes to your lawyer first, rather than you. They then disburse funds as required to pay for any other expenses, including the following:
- Paying off your pre-settlement loan (loan amount plus our one-time, flat rate fee)
- Paying off any medical lien funding
- Deducting their legal fees
- Paying back taxes
Once all the stakeholders in your settlement are paid, the rest of the funds go to you.
If You Lose Your Case
Most plaintiffs who receive legal funding go on to win their cases. But in the event your case goes to trial and the jury votes against you, or a judge dismisses your case, you won’t pay any of your funding back. Like your lawyer, legal funding companies get paid contingent on you winning your case.
The only exception would be if you committed fraud in your personal injury case.
Apply for a Pre-Settlement Loan Today
At High Rise Financial, we make applying for a pre-settlement loan fast and easy. Once you’re approved, we can deposit the funds into your account within 24-48 hours. We offer up to $1 million for each settlement, giving you a substantial source of funds to draw from throughout your legal fight.
If this sounds right to you, apply for legal funding now by filling out our online form. We serve customers across the United States and cover a wide variety of personal injury and employment cases.