Expenses can mount fast after a negligent accident or injury. The largest of these is often medical costs, which can’t wait and which you must pay out of pocket until your case settles. Not everyone knows where to turn for financial assistance in this scenario.
Maybe you’re under pressure to accept a low settlement just to pay for your medical care. If so, then medical funding services can help you gain financial breathing room while you fight for your rights. Learn more about how legal funding companies work, why you might want to consider them, and the potential advantages of going this route.
Why You Might Need Legal Funding
Picture the following situation: You’ve filed a claim after a car crash or workplace accident, or you’re taking legal action against a healthcare provider for medical malpractice. The case seems obvious to you, and you expect a quick settlement that will allow you to go on with your life.
But then, complications arise. An insurance company tries to dodge responsibility. Adjusters pin your injury on a pre-existing condition. The insurer answers your attorney’s demand letter with a ridiculously low offer that might be just enough to cover your immediate costs but certainly not rehabilitation or lost wages. Meanwhile, your attorney may work on a contingency basis, but you still need to pay for treatment out of pocket.
What should you do? At this point, many people accept whatever an insurance company offers because money is running out, and medical care is something you can’t delay. This gives insurers an unfair advantage and prevents injured people from fighting for fair settlements.
Legal funding can also help cover long-term care needs, such as expenses for a senior living community, while waiting for your case to settle.
Medical funding services — a.k.a. legal, litigation, or settlement funding — can step in here and give you the relief you need to seek medical care while facing a potentially lengthy lawsuit. You’ll repay the funding provider whenever you collect your payout.
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How Legal or Medical Funding Works
If you apply for litigation funding, the funding service will assess your claim’s strength and how likely you are to win a settlement. You and your attorney will supply relevant evidence, like your medical records, witness statements, the police report if one exists, etc. Your lawyer should also provide calculations of what your case is worth.
Once the lender approves you for funding, they’ll offer an amount based on your expected settlement, typically between 10% and 20%. If you’re pursuing a large claim, this should be a substantial sum that allows you to fund medical costs. You can also use litigation funding for living expenses, disability accommodations, and other upfront costs you might face after an injury. Much like organizing for a move, planning for these expenses requires careful consideration. When relocating, for example, it’s important to get an accurate moving estimate to manage your budget effectively and avoid unexpected financial strain.
Companies offering medical funding services work with plaintiffs, attorneys, and medical care providers. In the latter case, they may purchase accounts receivable in bulk and relieve providers from worrying about medical liens.
Is Settlement Funding a Loan?
Legal funding isn’t a loan in the traditional sense. With conventional loans, you receive a sum and must repay it within an agreed period, often making monthly payments.
With medical funding services, you only have to worry about repayment if and when your case settles. This type of relief works as non-recourse funding, meaning you don’t need to repay your case if you lose it. Thus, working with a reputable litigation funding provider is a low-risk option.
But Won’t Litigation Funding Eat Away at My Settlement?
Like your attorney’s fees (if your lawyer works on a contingency basis), repaying a legal funding provider will eventually come out of your settlement. You should consider interest rates and repayment terms before signing an agreement. However, litigation funding could help you win a larger settlement.
By relieving immediate financial strain, legal funding allows you to work strategically. You’ll no longer be under as much pressure to settle your case on any terms because you need money for urgent medical expenses. This gives you and your attorney more time to negotiate, build a stronger case, and pursue a lawsuit if necessary. Ultimately, you may walk away with more money in your pocket thanks to litigation funding, even accounting for repayment.
Do You Qualify for Legal Funding?
Medical funding services review each application on a case-by-case basis. Typically, the higher your chances of success, the likelier you are to be eligible for litigation funding.
Cases that often qualify for legal funding include:
- Car accidents
- Personal injury cases
- Workplace injuries
- Medical malpractice lawsuits
Unlike traditional lenders, medical funding providers usually don’t check your credit score or possible collateral. Your approval for funding will depend on how the provider evaluates the odds of winning your case.
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Types of Settlement Funding
Providers may offer several types of litigation funding, namely pre-settlement, post-settlement, and post-judgment funding.
Pre-Settlement Funding
This is what people usually have in mind when they mention litigation funding. The provider gives financial relief to the plaintiff while the outcome of their case is uncertain. This type of settlement funding is the riskiest to the provider since it’s hard to predict how a case will settle.
Post-Settlement Funding
Sometimes, a case settles successfully, but the plaintiff has to wait a considerable time for their payout. During this period, litigation funding can give you quick cash to cover medical expenses while an insurance company processes your settlement.
Post-Judgment Funding
Some complex personal injury and medical malpractice cases escalate to a lawsuit. If a judge rules in your favor, this concludes your legal battle, but you may still need to wait until the other side pays the awarded amount. If you’re facing delays in receiving your award, post-judgment litigation funding can give you immediate relief.
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The Pros and Cons of Legal Funding
Like any financial decision, accepting legal funding requires forethought and careful weighing of all the pros and cons. If in doubt, talk to your attorney. Your lawyer can let you know, based on their experience, how much your case is worth and how soon it’s likely to settle. This will help you decide whether legal funding is a good option.
Pros
The main advantages of litigation funding are as follows:
- Quick financial relief. If your claim or lawsuit lasts longer than expected, you may struggle with various expenses, like medical costs. Legal funding can relieve financial pressure while your attorney works on your case.
- No dependence on your credit score or collateral. Some people take out a traditional loan to cover expenses during litigation, but loan approval usually depends on credit and assets that can serve as collateral. In contrast, you may qualify for legal funding even with a poor credit score and no collateral, as long as your case is strong.
- Repayment depends on the case outcome. Litigation funding is non-recourse, meaning you only repay the lender if you win your case. This eliminates the financial risk associated with a traditional loan.
Cons
With all their benefits, litigation funding also involves some drawbacks, meaning:
- Fees and interest. Legal funding carries a high risk for providers, who often charge high interest rates to compensate for cases that might fall through. Apart from interest, you may have to pay application and processing fees.
- Accumulating fees. If your case drags out, fees may accumulate, inflating the amount you’ll eventually need to repay.
- Reduced settlement amount. Legal funding will come from your settlement amount, something you should consider when planning for the day after your case settles.
To make an informed decision, ensure you understand all the terms of your legal funding agreement. Always choose a reputable, trusted provider who offers a transparent contract and avoid shady brokers who might take advantage of your difficult situation.
Applying for Legal Funding
This is how applying for medical funding services typically works:
1. Contacting the Provider
After you call the funding company or fill out their online form, the provider will briefly look into your case and tell you whether you’d likely qualify for funding. They’ll also let you know what documents you’ll need to provide.
2. Case Review
At this stage, the provider will take an in-depth look at your case and decide whether they approve you for funding. The provider may ask you for different types of relevant documentation, including medical records, your attorney’s statement, and possibly evaluations by industry authorities (like medical professionals or vocational consultants).
Although legal funding doesn’t depend on credit score, the provider may still ask for some financial documents, like bank statements and tax returns, as proof of credibility.
3. Approval for Funding
If all goes well, the provider will approve you for legal funding. With a reputable and efficient company like Rockpoint Legal Funding, this can take as little as one day. Once you receive your cash, you can fund medical expenses and other pressing costs.
Why Work With Rockpoint Legal Funding?
Plaintiffs and attorneys nationwide trust Rockpoint Legal Funding. Clients choose us for our integrity, transparent terms, and quick, easy approval process that allows you to collect funds quickly when you need to cover urgent expenses.
When you work with Rockpoint, you can be sure of:
- Clear, easy-to-understand funding terms
- No hidden fees or surprise charges
- No compounding interest
- No credit checks
- Fast, efficient service
- Repayment only when your case settles successfully
Pay for Medical Care Worry-Free With Rockpoint
Are you struggling to cover medical costs after a car accident, workplace accident, or treatment gone wrong? At Rockpoint Legal Funding, we provide secure and reliable financial relief during personal injury cases. Apply today, collect the funding you need, and only repay if and when you win your case.
Contact us today to learn more about our medical funding services.
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