Settlement loan is money you receive from a pre-settlement company in order to cater to your day to day financial responsibilities awaiting your settlement claim. This is mostly in the case of a personal injury claim. These settlement loans help one to pay for their medical bills, car repairs, utility bills, rent or mortgage payments, and other financial obligations that may be stressing them out.
These loans can also be given in the event that a settlement has been reached but payments have not yet been done.
For most pre-settlement companies, they offer from as little as 500 dollars to as much as 250,000 dollars. Once you apply for a settlement loan, the pre-settlement company will have a sit-down with its lawyers and other legal advisors. They will want to ascertain whether or not your claim has a basis and if it is viable. After this, if there are no arising complications with your application, they will fund you within 24 hours.
It is also crucial to note that this is not an actual loan. Despite the name, it is a type of ‘cash advance’ you receive before receiving your expected settlement.
Apart from personal injury claims, there are a few more claims that qualify for settlement loans. These are and not limited to:-
- Product liability
- General negligence
- Medical malpractice
- Wrongful death
- Civil rights
- Workers compensation.
Before receiving a settlement loan from your pre-settlement company, there are a few steps that are taken:-
- The plaintiff together with their lawyer will contact the pre-settlement company
- The company and the plaintiff’s lawyer will calculate a rough estimate of the possible settlement winnings. If a win is not likely to happen, the pre-settlement company will conclude the meeting and decline to the payout.
- The lawyer and the pre-settlement company negotiate on the amount to offer as an advance.
- The plaintiff then signs the contract in the presence of their lawyer and gets the advance settlement
- Last but not least, the plaintiff does not pay the pre-settlement company until they have received their settlement from the court case.
As a plaintiff looking for appropriate funding from pre-settlement companies, it is wise to do extensive research on the best company to seek services from. To this effect, there are a few guidelines on how to get the most reputable and trusted company to give you a settlement loan:-
- Reviews – Make sure you do thorough research and read customer reviews. This will not guarantee anything but it will give you a hint of possible red flags.
- Accreditations – Look around to see if they have been accredited by any trade industries.
- Ask about their rates and interests – Stay away from companies that are not ready to disclose their fees and rates even after learning of your case. It is also advisable to shop around keeping in mind the various rates these pre-settlement companies are offering.
- Involve your lawyer – lawyers are very knowledgeable individuals. They may be able to catch one or the other tell-and –tale signs that the company is not legit
- Conflicts of interest – double check to make sure your lawyer has no financial attachments to the pre-settlement company.