인프런 커뮤니티 질문&답변

Pre-settlement funding, also known as lawsuit funding or legal financing, is a type of financial assistance that is provided to plaintiffs who are pursuing a legal claim or lawsuit. It is designed to help plaintiffs cover their living expenses and other costs while they wait for their case to be resolved.

There are several different types of pre-settlement funding, including cash advances, structured settlements, and non-recourse loans. Cash advances are typically the most common form of pre-settlement funding, and they involve the plaintiff receiving a lump sum of money in exchange for a percentage of their future settlement or judgment. Structured settlements involve the plaintiff receiving regular payments over time, while non-recourse loans require the plaintiff to repay the loan only if they win their case.

Pre-settlement funding can be a helpful option for plaintiffs who are experiencing financial difficulties while their case is pending. It can provide the necessary funds to cover things like rent, groceries, and medical bills, and can help plaintiffs avoid having to settle their case prematurely due to financial pressure.

There are several factors that plaintiffs should consider when deciding whether or not to pursue pre-settlement funding. One of the most important is the terms of the funding agreement, including the amount of the advance, the percentage of the future settlement or judgment that will be paid to the funding company, and any fees or interest that may be charged. It is also important to consider the strength of the plaintiff's case, as well as the likelihood of success and the potential amount of the settlement or judgment.

In addition to these considerations, plaintiffs should also be aware of the potential risks associated with pre-settlement funding. For example, if the plaintiff loses their case, they may be required to repay the advance, which could be a significant financial burden. Additionally, pre-settlement funding may also impact the plaintiff's negotiating power in settlement negotiations, as the funding company may seek to recoup their investment from the settlement or judgment.

Overall, pre-settlement funding can be a helpful option for plaintiffs who are facing financial difficulties while their case is pending. However, it is important to carefully consider the terms of the funding agreement, the strength of the plaintiff's case, and the potential risks before deciding whether or not to pursue this type of financial assistance.