The term settlement cash advance’ is often used very loosely and can mean many different things. Understanding the ways that this term is used and how it may apply to your case is vital to understanding the ways that this service can work for you.
What does settlement cash advance mean?
When a plaintiff files a lawsuit, a settlement is often achieved. This means that the defendant has agreed to pay a set sum in lieu of going to court to fight the case. A settlement cash advance essentially refers to any advance that is provided for the purpose of helping the plaintiff get through until a settlement on a lawsuit comes through.
Unlike other types of cash advances, where the funds are borrowed against a tangible asset, the funds in a settlement case lawsuit are borrowed against the favorable outcome of the case in question. This lending tool gives the plaintiff the ability to borrow against his case.
A settlement cash advance may also be referred to as lawsuit funding. These terms may refer interchangeably to both cases that have been settled and to those that are still pending. Post settlement funding, or a settlement advance, refers to a cash advance that is given for a settled case. Litigation financing or legal financing are advances provided for pending cases, as the funds are often used to further legal fees. These and many other types of financing can be found to assist plaintiffs who need more money both to further pursue their case, and to manage their personal finances while waiting for a settlement payment.
Filing a lawsuit is an expensive and time-consuming prospect. These various funding tools are designed to make it easier for plaintiffs to file their cases. Advance funding offers peace of mind and helps reduce some of the stress associated with the long and arduous process of pursuing a lawsuit.
What are the types of settlement cash advances?
There are two main types of settlement cash advances. As mentioned above, funds can be provided both for cases that have already settled, and for cases that are still pending. If the case has been settled, the funds are simply being provided to the plaintiff for a short period of time until the defendant’s money clears.
In instances where the case is still pending, it can be more difficult to obtain settlement cash advances. In these instances, the lender must carefully assess the case in question. If a settlement cash advance is provided, the lender wants to be reasonably confident that the plaintiff will win the case. The lender will only be repaid if the plaintiff wins, so detailed information on the case and the evidence therein must be provided.
The lender will want to understand three main parts of the case. Firstly, the lender needs to feel confident that the plaintiff will win the case. Second, the lender needs to understand how much the plaintiff expects to win. Thirdly, the lender must be assured that the defendant is in possession of adequate funds to pay the settlement.
What is needed for a settlement cash advance?
To obtain a settlement cash advance, the plaintiff must have a lawyer. Both the plaintiff and the attorney will be required to sign a contract. This serves as a lien on the pending or settled case. The contract gives the lender assurance that he will be repaid when the settlement comes through. The attorney is responsible for getting the funds from the defendant and providing payment to the lender. The presence of an attorney reduces the risks associated with lending large sums of money to a plaintiff in the form of a settlement cash advance.
What are the benefits of a settlement cash advance?
Even after settlement, it can take between 30 and 90 days for the plaintiff to receive payment of his settlement. In some cases, such as those involving personal injury, the medical bills cannot wait this long. When the plaintiff needs the money fast, a settlement cash advance can provide funding for more immediate concerns while the complications of settling a case in the legal system play themselves out.
Who is eligible for a settlement cash advance?
Settlement funding can be provided for many different cases. Some examples of lawsuits that may qualify include the following: