Can You Borrow Money From a Pending Lawsuit?
Lawsuits can be stressful and time consuming, unfolding over the course of months with little certainty in their conclusion. While you’re working with your lawyer, sending in paperwork, and waiting patiently for progress in your negotiations, you’ll be responsible for continuing to pay your mortgage and your other bills. You may be out of work during this time, creating even more financial stress to deal with.
This is not sustainable. Sooner or later, you’ll run out of money or your debts will become overwhelming, or both. That’s why so many plaintiffs attempt to borrow money from their pending lawsuits. But is this arrangement even possible? And if so, how can you borrow money from your pending lawsuit?
Why Pending Lawsuits Are So Financially Challenging
Pending lawsuits are a financial challenge for most plaintiffs, and for a variety of reasons. If you’ve suffered a personal injury, you’ll likely be unable to work – or you may be able to work only in a limited capacity. Because you’ll be busy with doctor’s appointments, physical therapy, appointments with your lawyer, court dates, and other responsibilities, you also won’t have much time to pick up a side gig. Ultimately, that means you’ll have little to no money coming in.
Throughout this process, all your previous financial responsibilities are going to remain active. You’ll need to pay your mortgage (or rent), your utilities, your loans, and all your other expenses – which are especially burdensome if you’re trying to support a family.
As if that weren’t enough, you’ll be dealing with the expenses of your recovery. Gradually, you’ll start seeing medical bills come in – and you may not have the resources to pay them.
The good news is, you’ll likely qualify for compensatory damages. The defendant or the defendant’s insurance company will be responsible for paying you back for any property damage, medical expenses, pain and suffering damages, and lost wages you’ve incurred. But even if the legal system awards you a juicy sum of capital, it might be months before you get it.
Options for Financial Assistance
So what are your options in the meantime?
- Rushing the process. You may be able to work with your lawyer to rush the process as much as possible. If you speed through the negotiation process and agree to take a small lump sum of capital, you may be able to resolve the case and get your money much faster than you otherwise would. The downside, of course, is that you probably won’t win as much of a settlement as you could otherwise. Your lawyer will likely advise you to hold out for more money and remain patient.
- Budgeting and strategic delay. Proper budgeting and strategically delaying the payment of your bills is another important option. Consider temporarily cutting your expenses, especially unnecessary luxuries, while you wait for your settlement to arrive. You should also know that some bills are more important than others; you can wait a long time to pay your hospital bills, but if you miss a rent payment, you could face immediate consequences. Think carefully about your expense priorities and avoid paying as long as possible.
- Credit cards. Some people turn to credit cards to help them get through the financial hardship of a pending lawsuit, but these are inadvisable unless you have a clear and immediate strategy for paying back what you borrow. Credit cards are notorious for extremely high interest rates, so if you don’t pay your principal back in a timely manner, you could end up with debts far more than what you initially borrowed.
- A conventional loan. Conventional loans from conventional lenders are another option, but they carry some of the same risks as a credit card. You’ll incur a debt with an interest rate that can quickly escalate the amount of money you owe. And if you don’t pay the loan back, the bank may impose a lien on your house (or other property) to secure payment. Plus, qualifying for a conventional loan is iffy at best – and if you have bad credit, this is basically a no-go.
- Borrowing from friends and family. You may also be able to borrow money or get financial support from friends and family members. Doing so may interfere with your personal relationship, however, so be sure to establish terms upfront and communicate your needs and abilities as clearly as possible.
Why Pre-Settlement Funding Works: Borrowing Money From a Pending Lawsuit
As you can see, most of these options are insufficient or inadvisable for one reason or another. But there’s a much better option for borrowing money from a pending lawsuit: pre-settlement funding.
As the name suggests, pre-settlement funding can provide you with cash while you’re waiting for your case to settle and your settlement to arrive. You’ll apply for the settlement loan (sometimes called a settlement advance), and if you qualify, you’ll receive the funds in 24 hours or less. Then, you can use that money however you want as you wait for your settlement.
When your settlement comes in, you’ll pay back the principal. Some pre-settlement funding providers also charge you interest (like with a credit card or conventional loan), but Capital Now Funding only charges a one time fee, so there is no recurring interest. Plus, the loan is non-recourse, so if you lose the case, you’ll owe nothing!
How to Qualify for a Pre-Settlement Loan
Qualifying for a pre-settlement loan is usually simple, and the application process is faster and more convenient than it is for a conventional loan. You’ll have to provide a handful of details, like your lawyer’s contact information, your contact information, and some information on your case. This is just to ensure you have a high likelihood of receiving a settlement, and will likely be processed quickly.
Pending lawsuits are often stressful and will always take time. But you don't have to wait months on end to get your settlement money. Apply for pre-settlement funding with Capital Now Funding today, and get access to the funds you need!