How Pre-Settlement Funding Works

Pre-Settlement funding, also know as litigation funding, is when a firm provides someone in a lawsuit with money in exchange for a part of the expected lawsuit settlement. 

Pre-settlement funding is not a loan. The money borrowed from the firm does not need to be paid back over a set period of time. Rather, plaintiffs sell a portion of their future settlement proceeds in exchange for a cash advance.

Pre-settlement funding can help avoid going into debt. For those who have been injured and are unable to work, it is very difficult to pay the bills without a stable paycheck from a job. Lawsuits can also be incredibly time consuming and mentally intensive. During a lawsuit that prevents a plaintiff from working, it can be very hard to continue making payments. Paying bills on credit cards can make things even worse by forcing one to carry even more debt, and possibly be forced to go into default and skip payments. This may require settling debt claims which could have a long-term impact on one’s finances. 

Have more questions? Learn more about our Detroit, Michigan pre-settlement funding firm, Visit our FAQ page or contact us. We also provide tips for searching for the best funding option for you.