Stonewood Funding

Can My Lawyer Deny Me From Getting a Pre-Settlement Loan? (2024)

Can My Lawyer Deny Me From Getting a Pre-Settlement Loan?

Most reputable legal funding companies usually require that you have a lawyer before you can apply for a pre-settlement loan. Although you can choose to represent yourself, even in a personal injury case, not having an attorney will make it more difficult for you to access legal settlement funding. As such, given that having a lawyer is, in a way, a necessity, can your lawyer deny you from getting a pre-settlement loan?

No, your lawyer cannot deny you from getting pre-settlement funding. However, your lawyer may have reasons to discourage or advise you against seeking a lawsuit loan. But it’s ultimately up to you whether to go for it or not.

At Stonewood Funding, we provide you with the pre settlement cash advance you need to take care of your medical bills and other expenses while waiting for your settlement check. Our online application for personal injury or car accident loans is quick, easy, and completely free. And you won’t owe us anything if your case is unsuccessful. Begin the process now by spending just a few minutes to apply online.

In this post, we explore the common reasons your lawyer might try to stop you from getting pre-settlement funding and your role in the pre-settlement funding process.

Why Your Lawyer Might Advise Against a Pre-Settlement Loan

Why Your Lawyer Might Advise Against a Pre-Settlement Loan

Ideally, the attorney representing you has the duty to protect your best interests both financially and in terms of the legal outcome of your case. Hence, it’s important to consider their advice carefully and explore all options before proceeding. Your lawyer might advise against taking a pre-settlement loan for several reasons:

  1. High-Interest Rates: Pre-settlement loans are non-recourse, meaning you don’t have to pay back the pre-settlement funding company if you lose. As a result, every legal funding company considers it a high risk, as such, they charge high rates to mitigate this risk.
  2. Expensive Costs Over Time: The cost of a pre-settlement loan can significantly increase over time due to compounding interest. The longer your case takes to settle, the more you will owe, potentially eating into a large portion of your settlement.
  3. Pressure to Settle Early: Having a pre-settlement loan might pressure you into settling your case earlier than advisable for a lower amount just to repay the loan. So, your lawyer might want you to hold on until the negotiations reach the expected settlement.
  4. Complex Agreements: The terms and conditions of lawsuit funding can be complex and difficult to understand. Your lawyer might be concerned about you entering into an agreement without fully understanding the implications.
  5. Reduction in Settlement Proceeds: Ultimately, taking out a pre-settlement loan reduces the settlement money, as a portion will be used to repay the loan and the accumulated interest.
  6. Availability of Better Alternatives: Your lawyer might advise against legal funding if there are better financing options available. This could include personal loans with lower interest rates or financial support from family or friends.

What to Do If Your Lawyer Advises Against a Pre-Settlement Loan

What to Do If Your Lawyer Advises Against a Pre-Settlement Loan

If your lawyer advises you not to obtain legal funding, the first thing you should do is to try to understand their concerns. Discuss with your lawyer and ask them to explain their reasons. Understanding the specifics can help you make an informed decision and might reveal potential risks you hadn’t considered.

Secondly, you might want to assess your financial situation to determine if the loan is truly necessary. Check if there are expenses you can defer until after your case is resolved. Sometimes, tightening your budget temporarily can be a better option. You should also discuss alternative solutions for your financial situation with your lawyer. This could include personal loans with lower interest rates, financial assistance from family or friends, or government or non-profit programs that offer financial support.

If you’re not satisfied after talking with your attorney, consider getting a second opinion from another legal or financial professional. A fresh perspective might offer new solutions, confirm your current lawyer’s advice, or solidify your standpoint.

However, if you decide to proceed with a pre-settlement loan despite your lawyer’s advice, try to negotiate better terms. You can seek loans with lower interest rates or more favorable repayment terms. More importantly, maintain open communication with your lawyer. Inform them of your decision and discuss how it might impact your case. Your lawyer’s support in the process is very important even if they initially advised against it.

Before accepting any loan, carefully review the agreement. Pay special attention to the interest rate, repayment terms, and any fees or penalties. If possible, have your lawyer or another legal professional review the terms to ensure you fully understand the agreement.

The Role of Your Lawyer in the Pre-Settlement Loan Process

The Role of Your Lawyer in the Pre-Settlement Loan Process

In the pre-settlement loan process, your lawyer considers the ethical implications of obtaining a pre-settlement loan and advises you on the best course of action, prioritizing your interests above all. They provide comprehensive information about pre-settlement loans, explaining the pros and cons, to help you make an informed decision. They also evaluate whether a pre-settlement loan is necessary for your situation or if there are better alternatives to manage your financial needs during the legal process.

Your lawyer examines the terms and conditions of any loan offers, ensuring that the interest rates are reasonable and the agreement is not predatory. If necessary, your lawyer may negotiate the terms of the loan with the legal funding company to secure more favorable conditions for you.

In a personal injury lawsuit, personal injury lawyers ensure that the process of obtaining a loan complies with all relevant legal standards and does not negatively affect your case. Additionally, your lawyer aims to protect the integrity of your settlement or award. As well as, to ascertain that the loan repayment terms do not excessively diminish your compensation.

Alternatives to Pre-Settlement Loans

Alternatives to Pre-Settlement Loans

There are several alternatives to pre-settlement funding that can provide financial relief without the high costs or risks associated with borrowing against a future lawsuit settlement. The following are just some of the many possible alternatives:

Personal Savings

Using your savings can be the most straightforward way to cover expenses without incurring debt. This approach avoids interest rates and legal fees from a legal funding company. However, bear in mind that it may affect resources reserved for your living expenses or future needs.

Family and Friends

Borrowing money from family or friends can offer a more flexible and interest-free alternative. You should approach such agreements with clear terms and understanding to prevent misunderstandings or strained relationships.

Personal Loans from Banks or Credit Unions

Personal loans typically have lower interest rates compared to pre-settlement loans. Unlike legal funding, they are based on your creditworthiness rather than the potential lawsuit settlement. It’s important to compare offers and understand the repayment terms.

Insurance Proceeds

Depending on the nature of your lawsuit, you might have relevant insurance coverage that can cover some of your expenses. For example, you may not need a car accident loan if your car insurance can cover the cost of the repairs from the accident.

Home Equity Loans or Lines of Credit

If you own a home with equity, a home equity loan or line of credit may offer lower interest rates than a pre-settlement loan. However, it’s crucial to consider the risk of borrowing against your home.

Credit Cards

For short-term needs, credit cards might be an option. While typically having higher interest rates than personal loans, they can be a viable solution if managed carefully to avoid long-term debt accumulation.

Contact us for a Free Consultation!

When considering the question “Can my lawyer deny me from getting a pre-settlement loan?”, you need to understand that your attorney’s advice is most likely in your best interest. Your attorney most likely understands more than you do how a lawsuit loan works. That means they might be in a better position to help you make the most suitable decision for your legal funding. So, be sure to consider your attorney’s advice or seek a second opinion if you’re still unsure.

If you have fears, questions, or concerns about how a pre-settlement loan works, you can book a call with us at Stonewood Funding for proper guidance. And if you’ve made up your mind on getting a lawsuit loan, our lawsuit settlement loans grant you fast access to funding in just 3 easy steps! Apply online now to access your pre-settlement cash advance.

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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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