People drive cars as a means to get around. This transport form is critical to people’s jobs and lives. So, it is safe to say cars are necessities. Yet, as with everything in life, there are downsides to driving cars. A significant hitch to driving is that accidents happen, and people get hurt.
Accidents are events that alter the victim’s schedules and way of life. Depending on its severity, it comes with huge expenses. Unfortunately, car accident victims are often unable to pay their bills. So, pre-settlement funding is crucial to all accident victims.
This article covers the basics, including lawsuit cash funding and getting a settlement advance from a legal funding company. Stay glued!
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What is Pre-settlement Funding?
Pre-settlement funding is an advance settlement loan for car accident victims. Settlement funding companies give this cash advance settlement to help victims pay bills. Also, it relieves the financial strain on the victim. That is before the court grants a judgment about an accident lawsuit.
Pre-settlement funding is not a conventional loan. So, the term “pre-settlement loan” may be misleading. You do not pay back the legal financing companies. They get their money from the injury claim when you win.
So, a pre-settlement company will give a settlement advance to a car accident victim if they can get their money back. So, they provide a settlement loan advance to victims with likely successful lawsuits. Pre-settlement finance may not be subject to rules that apply to regular loans.
A settlement cash advance can help with immediate expenses. However, it is wise to note that fees and interest rates may apply.
How Pre-settlement Loans Work
You should apply for a settlement advance loan if you need urgent cash after an accident. This will help you maintain your standard of living while you recover. It will also help you cover your debts and bills while waiting for your injury compensation. Pre-settlement loans help to relieve the financial burdens of car accident victims.
This is necessary because medical bills and legal fees can become overwhelming. In addition, the average person needs to earn more to plan for accidents. So, these circumstances may drain your income and savings.
In January 2022, a study showed that only 4 out of 10 Americans had savings that could cover extra expenses. This study found that most savings could only accommodate $1000 in expenses.
HealthCare.gov reports that an average 3-day in-patient stay in a hospital costs about $30,000. This proves that savings may not cover accident expenses. So, pre-settlement loans cover such expenses.
Qualifications for A Pre-settlement Loan?
Every settlement loan company has criteria for granting pre-settlement loans to applicants. Most companies will request that the applicant has the following qualifications:
- A personal injury lawsuit has been filed to claim damages
- The victim hired a personal injury lawyer
- If the victim has a steady income
- The type of loan and amount the victim is applying for
- The timeframewhen the victim needs the loan
- The other party bears most liability from the accident
The strength of the lawsuit always defines the victim’s qualification for advance settlement. A strong case suggests that the settlement company will get its money back. So, they always focus on such cases when considering advance settlements.
It will also help if you have an experienced personal injury lawyer. Most personal injury lawyers establish relationships with settlement firms. So, it is easier to get an advance settlement if your lawyer has such connections.
Who Qualifies for Pre-settlement Loans?
Accident victims qualify for pre-settlement loans based on several characteristics. Some of these characteristics include :
- Age: The plaintiff must be 18 years or more
- The extent of damage or injury: Injury or personal loss must be extensive. This assures the settlement company that you will get a settlement claim
Some personal injury cases that qualify for pre-settlement loans include:
- Bike accidents
- Car accidents
- Motorcycle accidents
- Defective drugs
- Medical malpractice
- Wrongful death
- Maritime accidents
- Aviation accidents
- Premises liability cases
- Pedestrian accidents
Benefits of Pre-settlement Loans
There are several benefits of pre-settlement loans. But these few stand out:
1. Asset Protection
No one plans to get in an accident. And when they occur, accidents change the course of your life. Sometimes, you are unable to perform business or work functions. You may have to trade your assets to keep afloat or pay bills. A way to keep your assets and pay bills can be helpful during this time.
So, it is beneficial to have pre-settlement loans. There is no credit check or collateral that needs to be provided against these loans. As such, they protect your business and home.
2. Limits Psychological Stress
We work to earn and make a living. With accidents, you may be unable to perform such functions. When you have a lawsuit, you also have to pay court charges. You may also have to worry about the length of the court case and if you will receive a settlement.
These all lead to psychological and emotional stress. It becomes worse when you have dependents who need you to provide. Imagine having to pay a child’s tuition or the mortgage on your home. Pre-settlement loans help to keep some money in your pocket. Having some money for your needs keeps you sane.
3. Cuts down Losses
You can get a pre-settlement loan within 24 hours of applying for one. It is a relief to accident victims because they do not have to pay back if they lose their claim. So, having a pre-settlement loan stops you from borrowing. It also helps you to cut down the losses from the accident.
These legal loans are reprieve for accident victims. It is also great that your friends and family do not have to know about these loans. It is the government’s way of protecting your interest and keeping you from creditors.
You get quite the amount in pre-settlement funding based on the value of your case. The settlement companies pay these loans to the degree of injuries or losses. However, companies are not always at a loss.
This is because they get their money back when the victim wins a case. If the victim loses the case, they do not have to pay back pre-settlement loans. Yet, victims have to pay fees and percentages on the loans they receive.
When applying for a pre-settlement loan, first research settlement companies to ensure that the settlement fees are fair and that the timeframe works for you. There are several benefits of applying for a settlement loan.
A major benefit is that these loans are easier to get than conventional loans. They are also less demanding. So, if you need a loan after a car accident, you should consider a pre-settlement loan.