What Is the Difference Between a Pre-Settlement and Post-Settlement Loan?
While you’re waiting for a personal injury lawsuit to resolve, you’re likely watching the bills pile up. If you’re hurt and can’t work for an extended period of time, it’s tough to pay medical bills, the rent, and other routine expenses. Fortunately, plaintiffs often have access to legal funding to tide them over until their lawsuit is resolved. Two forms of legal funding offered by LawStreet Capital include pre-settlement and post-settlement loans. These are similar, but there are key differences to be aware of.
Understanding pre-settlement loans
Legal funding is actually more like a cash advance than a loan because it’s non-recourse. Pre-settlement loans are issued when a plaintiff has not yet resolved their lawsuit, either with a jury award or settlement agreement. A legal funding company like LawStreet Capital can distribute a pre-settlement loan with the promise of a future jury award or settlement acting as collateral. The amount you can get approved for depends on the anticipated value of your claim.
Once you’ve been approved, you can use the money for absolutely anything you need—whether it’s legal fees, rent, or groceries. Assuming that you achieve a favorable resolution for your lawsuit, you’ll pay back the pre-settlement loan at a modest interest rate. However, if you lose your case, you won’t owe a dime. That’s why pre-settlement loans are a completely zero-risk option.
Taking a look at post-settlement loans
Post-settlement loans are similar to pre-settlement loans. However, these are distributed after the plaintiff has already agreed to a settlement or received a jury award. You may be wondering why you would need legal funding if you’ve already received a favorable resolution to your case. Quite simply, it’s because plaintiffs often don’t get paid in a timely manner. It may still be months or even longer before you’ll get a check from the defendant. In the meantime, you still have bills piling up that need to be paid. A post-settlement loan can bridge the gap and allow you to meet your obligations. Once you do get paid, you’ll pay back the loan at a reasonable interest rate.
Deciding whether legal loans are right for you
No matter which stage of litigation you are in, legal funding can be a great option. Lawsuit loans are a zero-risk cash advance that you can use to pay any of your obligations. Plus, there is no credit check required and no employment verification. If you need cash right now, you may be tempted to settle your lawsuit for less than what you truly deserve. Legal funding can help you hang in there and wait for a reasonable settlement offer. In addition, it’s possible to get approved for your legal loan within 24 hours!
Finding the help you need at LawStreet Capital
Once you decide that a pre-settlement or post-settlement loan is a good option for you, it’s important to choose the right legal funding company. LawStreet Capital is a well-established legal funding brand with a long track record of helping plaintiffs through transparent terms and some of the lowest rates you’ll find anywhere. Plus, if your application is approved, you could receive money in your pocket as early as tomorrow. Call us toll-free or fill out the simple form on our website.
Additional resources for plaintiffs:
- American Bar Association, Settlement Conferences, https://www.americanbar.org/groups/dispute_resolution/resources/DisputeResolutionProcesses/settlement_conferences/
- American Bar Association, Ethical Guidelines for Settlement Negotiations, https://www.americanbar.org/content/dam/aba/migrated/2011_build/dispute_resolution/settlementnegotiations.authcheckdam.pdf