What is Legal Funding?
Legal funding, also known as lawsuit funding or pre-settlement funding, is a financial tool that helps plaintiffs cover their living expenses and other financial obligations while waiting for their case to be resolved. These advances are typically provided by third-party funding companies, which evaluate the merit of the case and offer a cash advance based on the expected settlement amount.
How Does Pre-Settlement Funding Work?
When a plaintiff applies for a pre-settlement advance, the funding company will assess the details of the case, including the likelihood of success and the potential settlement amount. If approved, the plaintiff will receive a lump sum payment to help cover their immediate financial needs. In exchange, the funding company will receive a portion of the final settlement once the case is resolved.
Benefits of Pre-Settlement Advances
- Financial Relief: Pre Settlement Advances can help plaintiffs avoid financial hardship by providing them with immediate cash to cover living expenses and other costs.
- No Repayment if You Lose: In most cases, plaintiffs are not required to repay the advance if they lose the case.
- Non-Recourse: Pre-settlement funding is non-recourse, meaning that plaintiffs are not obligated to repay the advance if the settlement amount is lower than expected.
Understanding the Risks
While pre-settlement advances can be a valuable resource for plaintiffs in need of financial assistance, it's essential to understand the risks involved. Funding companies typically charge high fees and interest rates, which can eat into the final settlement amount. Additionally, if the case does not settle for the expected amount, the plaintiff may end up owing more than the original advance.
Conclusion
In conclusion, pre-settlement advances can be a lifeline for plaintiffs facing financial hardship during the litigation process. By understanding the essentials of legal funding and working with reputable funding companies like NuPoint Funding, plaintiffs can secure the financial assistance they need to weather the storm and pursue their case to a successful resolution.