Questions to Ask Before Getting Settlement Funding
When you are involved in a personal injury lawsuit, the financial strain can become overwhelming.
Medical bills, lost wages, and day-to-day expenses don’t stop piling up, even as you await the outcome of your case. This is where settlement funding comes in—it offers a financial lifeline when you need it most. But before committing to any pre-settlement funding option, it’s essential to ask the right questions to ensure it’s the best choice for your circumstances.
1. What are the terms of the funding agreement?
Before accepting a funding offer, you need to clearly understand the terms of the agreement. This includes how much you are borrowing, the fees associated, and the repayment structure. Some companies may include hidden fees or interest rates that could make your loan more expensive than expected. Always read the fine print and ask for a breakdown of all associated costs.
2. What happens if I lose my case?
One of the biggest concerns with settlement funding is what happens if your lawsuit doesn’t result in a settlement or a favorable verdict. In many cases, pre-settlement funding is “non-recourse,” meaning that if you lose your case, you are not required to repay the funding. However, you should confirm this with the funding company before proceeding.
3. How quickly can I receive the funds?
If you're in a financial bind, the speed at which you can access the funds is crucial. Many funding companies promise quick access to cash, but the actual time to receive the funds may vary. Make sure to ask how long the approval process takes and when you can expect the money in your account.
4. How much funding will I qualify for?
The amount of pre-settlement funding you qualify for is usually based on the estimated value of your case. However, you shouldn't take more money than you absolutely need. While it might be tempting to take a larger amount, remember that you will have to repay this sum, plus fees and interest, from your eventual settlement. Borrow only what you need to cover your essential expenses.
5. What’s the reputation of the funding company?
Before entering into a funding agreement, research the company you're considering. Look for reviews, testimonials, and Better Business Bureau (BBB) ratings. You want to work with a company that is reputable, transparent, and has a history of ethical practices. Avoid companies with a history of complaints or lawsuits.
Conclusion
Settlement funding can be a useful tool to help you through tough financial times while awaiting the outcome of your lawsuit. But it’s important to approach this option carefully, asking the right questions to ensure you’re making the best financial decision for your future. By doing your due diligence, you can avoid unnecessary financial stress and secure the funds you need to cover essential costs.
