Understanding Lawsuit Financing: A Guide for Plaintiffs

Disclaimer: Consumer legal fundings and advances are not loans under applicable financing laws. Rockpoint’s products are non-recourse, meaning if you don’t win your case, you don’t have to pay us back. Receiving financial support in connection with a legal case is typically (and oftentimes incorrectly) referred to as a “lawsuit loan” or “loan.” Therefore, for the ease of search references, these terms may be used in this context to refer to our funding products, but we maintain our separateness from consumer loan products in all legal aspects. 

You expected your legal case to settle weeks ago, but there’s still no end in sight, and it’s starting to worry you. What if your savings run out? How will you pay for your legal fees, medical bills, and other necessities?

If you’re strapped for cash, lawsuit financing may be the answer. In this guide, Rockpoint Legal Funding, a trusted provider of lawsuit loan services, explains what you need to know about lawsuit financing.

What Is Lawsuit Financing?

Lawsuit financing is a non-recourse advance on your settlement. Legal funding companies provide you this advance with the expectation that you will win your case. When you win, the funding company will take its payment as a percentage of your settlement.

Lawsuit financing is ideal if you need quick access to cash for urgent expenses, such as medical bills and legal fees.

Lawsuit Financing vs. Loans

You may wonder why someone wouldn’t just go to the bank for a loan rather than apply for lawsuit financing. The main reason is that traditional loans aren’t accessible to every plaintiff. For approval, you’ll usually need to provide collateral, such as real estate or other non-liquid assets. Not every plaintiff has assets to use as collateral.

Additionally, you’ll need to go through a credit check when you apply for a loan. If your credit score isn’t up to par, the bank will deny you.

Because lawsuit financing works on contingency-based repayment, you never have to provide collateral (other than your lawsuit settlement). You also won’t have to undergo a credit check, so you can be approved for funding even with poor or no credit.

Pre-Settlement Funding vs. Post-Settlement Funding

Interested in finding a lawsuit loan? There are two types of lawsuit advances available to you: pre-settlement funding and post-settlement funding.

Pre-settlement funding is ideal if you’re not yet sure whether you’ll win your case, when that might happen, or what your settlement amount might be. This type of funding provides cash for legal fees and daily expenses.

If you’ve already won your case and are waiting for the court to distribute settlement funds, you may opt for post-settlement funding. It can take the court several months to distribute your settlement after the case is over. Post-settlement funding helps tide you over until then.

Who Should Use Lawsuit Financing?

Not sure if lawsuit financing makes sense for you and your legal strategy alignment? Consider applying for legal funding if:

• Your lawsuit is dragging on for a long time, and you’ve nearly drained your personal savings and maxed out your credit cards to pay the bills.
• You can’t work because of your injuries, and you’re not sure when your settlement check will arrive.
• You’ve tried to apply for a loan, but the bank denied you because of a lack of collateral or a bad credit score.
• The insurance company is lowballing you and you want more time to negotiate for a higher settlement.
• You need cash immediately and don’t have time to wait for your case to settle.

What Can You Use the Funding For?

Lawsuit funding puts cash in your pocket to use for anything you may want or need. Plaintiffs often use the money to pay for medical bills while they wait for their cases to settle. Medical bills can total five or six figures, and they don’t stop climbing once you’ve left the emergency room. Litigation funding was made for difficult times like these.

You can also use lawsuit funding to pay for legal fees and keep your case going. Often, plaintiffs would like to wait for a larger settlement, but because they run out of money, they’re forced to settle for far less than their case is worth. With legal funding, your lawyer will have more time to negotiate for the fairest possible settlement.

Other uses for legal funding include:

• Buying groceries and household supplies
• Paying down credit card bills and other debt
• Repairing or replacing your vehicle
• Adding necessary modifications to your home to accommodate a disability

How Does the Lawsuit Financing Process Work?

Compared to applying for a loan, the lawsuit financing process is quick and straightforward. Here’s how it works.

1. Call us to determine whether you have a valid case type. We fund a variety of personal injury cases, including car and truck accidents, pedestrian accidents, premises liability cases, catastrophic injuries, and wrongful death cases.
2. Before applying, you must have hired a lawyer for your case. We only work with clients who have retained legal counsel. This is because you’re more likely to win your case with a lawyer’s help. Your lawyer will also be responsible for repaying your advance after the case settles.
3. Submit your application and our team will decide if your case is a good match for lawsuit financing. We consider the strength of your case, the approximate value of similar cases, and the estimated time for the case to resolve.
4. If we approve you for lawsuit financing, we can typically deposit the funds into your account within 24 hours or less.
5. You do not owe us anything until after your case settles. Your lawyer will handle repayment on your behalf.

Apply for Settlement Funding Now

Wondering, “What are lawsuit loans and how do they work?” Rockpoint Legal Funding is here to answer all your questions. We provide financial relief through pre- and post-settlement funding. When your bills can’t wait, we’ve got you covered. For a free case evaluation, call us at (855) 591-2489.