Can I Get Pre-Settlement Loan Funding Without My Attorney’s Consent?

Do I Need My Attorney’s Consent To Get a Pre-Settlement Loan?

A common question people awaiting a lawsuit settlement have when contacting a lawsuit funding company for financial assistance is the role their personal injury lawyer or civil lawsuit attorney has in the settlement loan process. When you suffer harm through a personal injury case, wrongful termination case or other type of claim for damages, the law firm that you hire to represent you will conduct an investigation to gather evidence to prove liability and damages before starting a lawsuit.

When you submit an application with a litigation funding company for a cash advance, the company conducts an evaluation of the strength of your claim for damages and the potential value of a settlement or award after trial. Much of the information the company needs to make its decision as to whether to approve your application comes from the attorney or law firm that is handling your lawsuit.

Your lawyer needs to show the pre-settlement funding company the evidence that proves you have a strong case that is likely to result in a judgment or negotiated settlement in your favor. A lawyer’s file also contains information about the lawsuit that is needed for the underwriting process, including:

• Name and location of the court where the lawsuit was filed.
• Names of the parties and their attorneys.
• Status of the lawsuit, including steps completed in the litigation process.
• Status of settlement negotiations, including offers and demands made in the lawsuit.

Although the consent or permission of your attorney is not a requirement for you to be approved for a lawsuit loan, your lawyer’s cooperation is essential to the approval process. An attorney who is opposed to lawsuit funding may not be willing to cooperate with the funding company and could jeopardize your application.

The best way to get your lawyer onboard with the idea of a lawsuit loan is to explain the reason that you need the funds before starting the application process. Go into details with your attorney about the financial pressure that you are under and how you plan to use the money that you receive through a settlement loan, including:

• Medical bills
• Rent or mortgage
• Food
• Car or home repairs

If the lawyer handling your lawsuit continues to refuse to cooperate in your efforts to get a lawsuit loan, you may need to consider changing law firms or come up with an alternative source for getting the money you need until the case is settled.

What’s the Process of Pre-Settlement Funding?

The pre-settlement funding process is relatively easy, but you should not submit an application before shopping and comparing rates and terms of loans offered by a few of the lawsuit funding companies doing business in your state. Involving your attorney in the selection process accomplishes two things. First, your attorney can probably advise you from first-hand experience with other clients about the pre-settlement funding process and the companies offering cash advances. 

Another reason why it’s a good idea to get your lawyer involved in the selection is to ensure cooperation during the application and underwriting process. If your lawyer does not approve of what you plan to do, it is better to know before you apply for the loan than to find out later when it may be too late to change legal representation to a lawyer or law firm that is willing to cooperate with a pre-settlement company.

Now that you have decided that pre-settlement funding can help resolve your current financial burden and have selected a company to apply to for the cash advance, the following are the typical steps in the process:

• Hire an attorney: Legal funding companies require that a lawsuit be filed before you complete and submit an application for a settlement loan. As previously explained, your attorney plays a significant role in the approval process, so retain the services of legal counsel and discuss your plans before applying for funding.
• Apply for legal funding: Funding companies typically give you the option to apply online for a lawsuit loan. You need to provide them with your name, contact information, and the name and contact information of your attorney along with a brief statement about the nature of the lawsuit. Any additional information will be obtained by the company directly from your lawyer. You will not be asked to agree to a credit check or provide information about your income and assets that you own because a lawsuit loan is a non-recourse loan, which means the company cannot look to you for repayment. Repayment of the cash advance and the interest due on it comes from the settlement or award in your lawsuit.
• Get approved for pre-settlement funding: The company you apply to for funding evaluates your claim and the evidence that your lawyer has gathered to prove that you were harmed and suffered damages because of the conduct of another person or company. If it decides that you have a strong case and are likely to win, the funding company determines the value of the lawsuit. In other words, you must be expected to receive at least enough to pay back the cash advance and the interest owed to the company that approves the cash advance.
• Review proposed funding agreement with your attorney: Depending on how quickly your lawyer provides requested information to the funding company, the approval process takes only hours or days rather than months for a traditional loan through a bank or credit union. Once you receive the written approval, carefully review it with your lawyer to make certain the amount of money being advanced to you and the interest, fees and other terms and conditions of the lawsuit funding are what you expected. 
• Decide whether or not you want to move forward with the pre-settlement loan: After you discuss the offer with your lawyer, you have to decide whether to accept the terms, including amount of the cash advance and its cost, that are being offered. Unless you have an offer from a relative to give you money or have another source for the money that you need for medical expenses or other pressing financial obligations, you need to make a decision about the pre-settlement lawsuit loan.
• Secure the loan: If you decide to accept the cash advance from the company that approved your application, the funding company sends documents to your lawyer to finalize the transaction. When you and your lawyer sign them, you agree to accept the lawsuit loan in the amount and at the interest rate stated in the documents. Your lawyer and you agree that the money advanced along with interest earned on it will be repaid from the settlement or award after your attorney’s legal fees and the litigation expenses are paid. The documents should also state that if you lose the lawsuit, or the settlement or judgment is insufficient to repay the entire amount of the advance and interest, you are not personally obligated to the loan company. Once the documents are signed and returned, the funds for the lawsuit advance will be deposited to your account, which typically happens within 24 hours.

Conclusion

Pre-settlement funding may be the solution when you have a lawsuit pending that will eventually result in a money judgment or settlement. Pre-settlement loans give you a cash advance to use however you see fit. Attorney consent is not required, but the attorney providing legal representation to you in the lawsuit must be willing to cooperate with the funding company during the application review process.

Questions Others Are Asking About Pre-Settlement Funding

The following are answers to some of the questions that people in need of a lawsuit loan frequently ask:

How many pre-settlement loans can I get? 

The answer depends on the value the lending company places on the anticipated settlement or judgment. Companies typically cap the amount they lend at 10% of the value of your case, so if a company advances you $5,000 on a lawsuit they value at $50,000, you would be unable to get more money through an additional cash advance.

Can I get a same day cash advance?

Depending on how long it takes for the lending company to get the information it needs from the attorney representing you in your lawsuit, an application can be approved in one to two days with a direct deposit of the funds within 24 hours of acceptance of the approval.

What do I owe if I lose my lawsuit? 

You only want to apply to lenders that agree to only look at the proceeds from your lawsuit settlement for repayment of what is owed to them. If by some chance you lose the lawsuit, the lending company cannot come after you for repayment.

What types of cases are eligible for lawsuit funding? 

Any type of lawsuit where the relief demanded is a judgment in favor of the plaintiff is eligible for lawsuit funding. This includes all types of cases, including personal injury, breach of contract, civil rights violations, and wrongful termination from employment. 

If you have other questions about lawsuit funding, ask your lawyer or the funding company where you are applying for the loan.