Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

When debt collectors come after

Summary: Are you being sued for debt? Pre-settlement lawsuit funding might help you out of a bind. Here's SoloSuit's guide to the advantages and disadvantages of lawsuit loans.

Lawsuits and litigations come with unexpected expenses. For example, you may need to pay for your medical bills to treat injuries from a car accident that led to the lawsuit. These injuries may also keep you out of work for a while, making it impossible to earn a living to manage your expenses, such as your credit card bills or rent. That's where pre-settlement lawsuit funding comes in.

Here's everything you need to know about pre-settlement lawsuit funding.

What is pre-settlement lawsuit funding?

Pre-settlement lawsuit funding gives you access to money to pay for the mounting legal expenses and other bills incurred during a lawsuit. This arrangement has its pros and cons that you should consider beforehand.

You can apply for a lawsuit advance from a settlement advance company as many traditional banks and credit bureaus may not have this option. After winning your case, you'll pay back what you borrowed, including the interest charged by the funding company.

Pre-settlement funding has lots of advantages

The main advantages of a lawsuit advance include:

Pre-settlement funding lessens Financial Strain

The primary role of lawsuit advance cash is to ease your financial burden as you await the final ruling on your lawsuit. A lawsuit comes with several challenges that may affect your daily life, including your financial stability.

As a result, you may need more money to pay bills, legal fees, and other expenses.

Pre-settlement serves as an income source if you're unable to work

If you're injured and unable to work, you will need money for your medical expenses. In addition, your living expenses, such as credit cards and utility bills, may pile up too fast when you're out of work. A lawsuit advance allows you to pay these bills on time instead of waiting for the lawsuit settlement.

Lawsuit advance loans are low-risk

Pre-settlement lawsuit loans often have lower risks compared to bank loans. Unlike bank loans, you won't need to pay any monthly installments or interests if you lose your case. This is because the funding company assumes all the lawsuit risks despite its outcome.

In addition, you don't need collateral to obtain a lawsuit loan—your funding is entirely based on your lawsuit assessment.

No credit history is needed

Pre-settlement lawsuit funding companies don't check your credit history before approving your funding request. You also don't need a job to qualify for lawsuit loans because you don't need to make partial payments to pay back the money you borrow. Instead, the funding company assesses the merits of your case to determine and decide whether or not to approve your funding request.

Litigation funding gives you time to negotiate a better settlement offer

If you're struggling financially, you may be tempted to accept a lower lawsuit settlement offer than what you deserve. Taking out a lawsuit loan gives you more time to challenge your case in court to obtain a fair settlement. It also gives you peace of mind as you seek justice.

Pre-settlement lawsuit funding also has some cons

Lawsuit loans have their disadvantages as well. Examples include:

Lawsuit loans can be expensive

Essentially, a pre-settlement lawsuit funding company assumes the risks involved in your case by giving you money, hoping you will win the case. If you lose the case, the company also loses its money. For this reason, most funding companies include a lot of fees to make up for the losses they may incur from investing in your case. These charges may include extravagant processing fees, application fees, origination fees, and more.

You only receive a portion of the value of your lawsuit

Lawsuit loans funding companies only issue a small percentage of the estimated value of your lawsuit settlement even if you need more money. Usually, funding companies limit their funds to 15% to 20% of the estimated value of your lawsuit.

A lot of documentation is needed

Even though a funding company won't assess your credit history, they will need a lot of legal paperwork to evaluate your case before deciding if it's worth funding. Depending on the procedures of the funding company, your attorney may fill out a lot of paperwork on your behalf as part of the lawsuit loan application process. This may take several days to complete, and approval isn't guaranteed.

Key Takeaways

A pre-settlement lawsuit funding can ease your financial burden when faced with a lawsuit. In addition, you don't need to worry about your credit history or having collateral to qualify for a lawsuit loan. However, if you need a significant amount of money, this product may not satisfy your needs, given that funding companies limit the amount of money they invest in a lawsuit.

If you've found yourself in the middle of a lawsuit and need help responding, SoloSuit can help you draft a written Answer in minutes.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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