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Borrowing Money Against My Settlement: How It Works (2022)

If you’ve recently been injured and filed a personal injury lawsuit to recoup damages, you are likely hoping for a fast settlement. However, in some cases, it can take law firms months or years to settle your claim.

The legal system isn’t known for speed, and many factors can influence the time it takes to get your settlement proceeds. Insurance companies may bicker with your attorney, or courts can be overloaded & overbooked, resulting in a court case scheduled months later.

During the interim time, you may have difficulty paying for basic living expenses, especially if you cannot work due to your personal injury. Not being able to pay bills can take an additional toll on your health, as you may be using credit cards or borrowing money from friends and family to stay afloat.

Many people in this situation may wonder: Can I borrow money against my settlement?

Pre-settlement funding was established to help plaintiffs waiting on a pending legal claim. A pre-settlement loan is a type of legal funding that provides people waiting for the final decision from a court case with the money they need to pay bills.

These lawsuit loans are similar to a cash advance, where money is provided with the expectation that it will be repaid with future settlement funds.

Lawsuit loans can be a lifeline, especially for people who can’t obtain money in more traditional ways. Getting a bank loan or credit card to fund your living expenses can be challenging, especially if you aren’t able to work or have a poor credit history. Since a lawsuit loan doesn’t require a credit check, getting the money you need can be much easier.

To qualify for a personal injury lawsuit loan, you’ll just need to show that you have an open lawsuit and have hired a law firm to pursue your case. The amount you can obtain through legal funding will be determined based on the expected settlement value of your case.

Once you have obtained your loan, there is no need to make monthly payments on your cash advance. The money you get from Stonewood Funding will be repaid once (and only if) you receive your final settlement.

If you lose your case, you owe us nothing.

Can I Borrow Money Against My Settlement with a Lawsuit Funding Company?

Yes, you can borrow money against your expected personal injury settlement. To start the pre-settlement loan application process, you just need an open lawsuit and to be working with an attorney.

The strength of your case will determine the money you can obtain. The more that you expect to receive from your lawsuit, the more Stonewood Funding will be able to offer you.

Our settlement funding loans are considered to be a type of non-recourse lending. This designation means that you are not expected to pay any monthly payments toward your loan while awaiting the court’s judgment or a settlement offer.

Once your case is settled or found in your favor, the cost of your loan is deducted from the settlement proceeds. If your claim is unsuccessful and you don’t receive any settlement, we absorb the cost of your loan. You will not need to pay us back at all.

How Much Money Can I Borrow Against My Pending Lawsuit?

Lawsuit loan companies can typically offer a percentage of your expected settlement money in legal funding. Of course, you should only borrow as much as you need to meet your living expenses. Legal funding can be costly, and you don’t want the entirety of your settlement proceeds to be spent on your cash advance.

Take a solid inventory of what financial assistance you need and how long you expect to be waiting to receive the proceeds from your legal claim. Someone who doesn’t expect their case to settle for a year or two will likely need more money than someone whose case is expected to settle within the next two months.

Keep in mind that additional loans are possible if you need them.

For example, suppose that you borrow only enough to cover your expenses for the next two months, and your case is pushed back. In that case, you may need additional pre-settlement funding to help you get by in the coming months. Stonewood Funding can help you obtain a second round of litigation funding if required.

Common types of expenses that legal funding can be used for include:

  • Medical bills
  • Mortgage and rent payments
  • Utility costs
  • Transportation expenses
  • Daycare
  • Family expenses
  • Education costs
  • Food and basic living costs

There are no restrictions on what you use your legal funding for. You can decide how to use your money.

How Many Loans Can You Get on a Pending Settlement?

There is no limitation on the number of loans you can obtain through legal funding. Some people start with a small cash advance and then borrow additional money in the future if needed. Others borrow the entire amount available through settlement funding with their first loan.

During the loan application process, we’ll begin by assessing the expected value of the outcome of your case. The estimated value is determined by the information you and your attorney provide. We will make our initial offer for lawsuit funding following our full assessment. You can take the entire proposal, or you can choose to borrow less.

If you find that you need more money to meet your bills in the coming months, you can always ask us for another loan. There is no impact on your credit score when you decide to apply.

Of course, when you decide to apply for an additional loan, we will need to go through the assessment process with you and your lawyer again. Reviewing the information concerning your case allows us to determine whether any circumstances have changed that may affect the settlement value and hence the amount of money we can offer you.

What Types of Claims Are Eligible for Borrowing Against Your Lawsuit?

At Stonewood Funding, we can provide lawsuit funding for a variety of different personal injury lawsuits. Common lawsuits that we provide legal funding for include:

  • Automobile accidents
  • Wrongful deaths
  • Defective drugs or medical devices
  • Dog bites
  • Sports injuries
  • Construction accidents
  • Police brutality
  • Product liability
  • Maritime or boat accidents

We also offer post-settlement funding for plaintiffs who have reached a successful settlement but have yet to receive their settlement check and need cash.

If you don’t see the type of case you have filed on our list, don’t hesitate to call us at 844-544-3863. We can review your case and determine whether it is eligible for litigation financing with Stonewood Funding.

What Are the Steps to Lawsuit Borrowing?

You’ll need to follow several steps to obtain pre-settlement legal funding through lawsuit loans.

1. Start Your Loan Application

Begin the loan application process online by filling out our simple free application.

You will need to provide us with basic information, including your name, email address, phone number, and the type of lawsuit you have filed.

If you’d rather speak with a loan specialist over the phone, you can call us at 844-544-3863.

2. Notify Your Lawyer

Due to attorney-client privileges, your attorney cannot discuss the facts or circumstances of your case unless they have your express approval. Call your attorney and tell them that you have applied for pre-settlement funding with Stonewood Funding. Notifying them of your lawsuit funding application ensures they aren’t caught off guard when we contact them.

3. Ask Your Attorney to Call Us

While we are happy to contact your attorney regarding legal funding loans, most attorneys are busy attending client meetings, performing research, and handling court appearances. In many situations, calls made to them will be sent to voicemail, which can delay your application for funding.

It’s often best if your law firm contacts us to start the loan process. Your attorney can better facilitate the loan process by calling our team directly at a time that works for them. We always have someone available to accept the call and talk with your lawyer.

4. Provide Us with the Details of Your Case

Your attorney can provide us with the relevant details of your case. You can ease the burden on your lawyer by giving us everything you have available, including court documents, medical records, a list of the plaintiffs involved, police reports, and other applicable information.

The information you provide can give us a head start in the loan application review process. However, we will still need to speak with your attorney for additional information, such as the timing expected for your future settlement and its estimated value.

5. Review and Sign the Legal Funding Contract

Once we receive the information required to finalize your loan, we will prepare an agreement for you and your attorney to sign. The loan agreement will indicate the amount you are borrowing and upfront fees such as transaction costs, origination fees, and underwriting expenses. It will also indicate the interest rate associated with your loan.

We believe in transparent contracts, so the agreement should be easy to understand. It will contain the terms and conditions for repayment and other relevant information. Of course, if you have questions about the agreement, you may ask us for clarification.

Our team can’t begin the lawsuit loans funding process until we receive a signed contract from you. Both you and your attorney will need to sign the contract. Once it’s signed, you can return it to us.

6. Get Your Cash Advance

We’ll begin the transfer of funds as soon as we receive your signed contract. In some cases, we can deposit the money into your bank account on the same day. However, if you don’t meet the deadline, we can transfer it on the following business day, pending the receipt of the required documents.

When Do I Have to Pay Back the Cash Advance?

One of the best parts of obtaining pre-settlement funding is that you don’t have to make any payments toward your loan while your case is pending a lawsuit settlement.

As a non-recourse loan, Stonewood Funding only gets paid if your lawsuit is concluded favorably on your behalf. This setup means that we only get paid if you do. The amount that you have borrowed will be refunded to us by your lawyer once a settlement check is issued.

If you choose to repay us before your fair settlement, you can do so. You may be able to save money on interest if you repay your loan early. Our loan specialists will be able to explain how early repayment works and how it will affect your loan.

Do Lawyers Give Advances on Settlements?

Due to the nature of their profession, lawyers are unable to provide settlement loans to their clients. It is against their code of ethics. However, they can cover your upfront legal expenses, such as court filing costs and the time they spend working on your case.

While your attorney can’t provide you with an advance on your settlement, they must work with a lawsuit funding company if you apply for a loan. Your attorney must answer questions related to your case, including when they expect it to be finalized and how much of a settlement you may obtain.

Additionally, your attorney can significantly assist in speeding up the loan application process by working with us and answering questions related to your case. They will also be required to sign your legal funding contract before we can transfer funds to your bank account.

What Is the Interest Rate on Pre-Settlement Funding?

The interest rates for a lawsuit loan vary tremendously. The amount of interest usually depends on the strength of a case, the length of time it will take to receive an expected settlement, and the amount borrowed.

Since litigation funding is a non-recourse loan, the lawsuit funding company is taking on the risk that your case may not be settled in your favor. The funding company must absorb the financial loss if you lose your lawsuit. It cannot chase you for the amount that you borrowed.

Cases expected to be settled very soon often receive the lowest interest rate. Borrowing a smaller amount of money can also reduce your interest rate.

At Stonewood Funding, we want to ensure that you have the best experience possible with our litigation financing. There are no hidden fees associated with our lawsuit loans. We ensure that our lending contracts are as transparent as possible so that you can make the financial decision that is most appropriate for you.

Upfront Fees

Some funding companies may charge upfront fees. You should stay away from these funding companies. A reputable funding company will never ask you for money during the application process, nor will they require you to make monthly payments.

Origination Fees

Origination fees are commonly charged for lawsuit loans to cover the administration tasks associated with overseeing your loan. However, it’s wise to look out for origination fees that significantly increase the cost of your loan.

For example, if you borrow $10,000 for settlement funding with a 30% origination fee, you’ll pay an additional $3,000 for your loan, plus any interest or other expenses applied to the loan.

When reading through your settlement funding contract, ensure you fully understand the terms and conditions of the agreement. This understanding can help you to avoid significant charges down the line that you weren’t expecting.

The trained lending specialists at Stonewood Funding can help ensure that you fully understand the costs of your loan and answer any questions you may have.

Do Banks Give Lawsuit Loans?

No, you can not borrow money against your settlement through a bank. Banks are prohibited from providing legal funding based on an expected lawsuit settlement.

In fact, borrowing from a bank to obtain money to pay medical bills may be a poor financial decision since you will be required to make monthly payments on your loan regardless of whether your personal injury lawsuit is successful.

However, litigation funding can be obtained with the help of a legal funding company like Stonewood Funding. We offer non-recourse loans, meaning we only get paid if your case is successful.

What Happens If I Lose My Case?

If you lose your case, Stonewood Funding absorbs the cost of your loan. You will not be required to make any repayment for your loan to us. One of the best benefits of legal funding with a lawsuit lending company is that you don’t take on the risk of repaying your loan if you lose your case.

Suppose that you borrow money to cover costs related to your personal injury from another source, like a bank or a credit card lender. In that case, you’re still responsible for repaying the money, even if you don’t receive a settlement.

Borrowing money from a bank with the expectation of repaying your lender once you receive a settlement offer can leave you worse off financially since you’ll need to repay them through other means if you lose. Personal injury victims who can’t work can find repayment next to impossible without the assistance of a settlement.

How Long Does It Take to Receive My Cash Advance?

The length of time that it takes to obtain your cash advance depends on how quickly you can coordinate with us to provide the documentation and information we need to process your loan. If you can get us all of the information and a signed loan contract before noon PST, we may be able to transfer the money you borrowed within the same business day.

If we don’t receive all the information required to review your loan, the processing is often possible on the next business day.

To speed up the time it takes to receive your money, we recommend that you follow a few steps:

Tip #1: Get Your Lawyer on Board

Your lawyer will need to work with us to provide specific information related to your personal injury case, such as the amount you expect to receive from your settlement and how long it may take for the case to process.

To speed up the time it takes to borrow money, notify them immediately that you are applying for a loan with Stonewood Funding. You can also provide them with our phone number so they can contact us with information about your legal claim.

Tip #2: Contact Us Via Phone

When you want to get us started on your loan processing, call us at 844-544-FUND(3863). Let us know that you are attempting to obtain a lawsuit loan as soon as possible. This information allows us to begin working on the administrative details of your loan, and we will make your case a priority.

Tip #3: Provide Stonewood Funding with the Information We Need

We can’t process your loan without specific details related to your case. It’s best to assemble any relevant documents pertaining to your case and have them ready to send for review. Standard documents that we ask for include court filings, medical records, medical bills, and other relevant information applicable to your case.

Tip #4: Start Your Application as Early as Possible

Don’t delay in applying for your loan. You can call us early in the morning to start the process, which gives you time to coordinate with your lawyer and assemble records related to your case that we will need to review.

Once we have spoken with your lawyer, we’ll provide you with the amount you can borrow and a loan agreement. You and your attorney will both need to review the loan agreement and sign it for approval.

Do You Need Legal Funding for Your Expected Settlement?

At Stonewood Funding, we provide pre-settlement legal funding to help personal injury victims pay medical bills and obtain money for living expenses while waiting for their final settlements. Our company has worked with personal injury lawsuits and law firms all over California.

To obtain the money you need, begin the application process using our online loan application form or by calling 844-544-3863. Our helpful loan specialists are available to assist you every step of the way.

Questions? Contact your local Los Angeles pre-settlement funding company today!

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Need cash before your case settles? There is no fee to apply, and you owe us nothing if you lose your case.

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