While it can be a helpful resource for those in need, there are many misconceptions about pre-settlement funding that may discourage potential applicants. We’ll explore 5 of the most common misconceptions about pre-settlement funding and try to resolve your doubts.
1. Pre-settlement funding is a loan.
One of the most persistent misconceptions about pre-settlement funding is that it’s a loan. In reality, pre-settlement funding is a cash advance against the potential settlement or verdict in a lawsuit. Unlike loans, pre-settlement funding doesn’t require monthly payments, collateral, or credit checks. If the plaintiff doesn’t win the case or receive a settlement, they aren’t required to repay the advance.
2. Pre-settlement funding is expensive.
Another common misconception is that pre-settlement funding is expensive, with high-interest rates and hidden fees. While it’s true that pre-settlement funding companies charge fees for their services, these fees are typically non-recourse, meaning that the plaintiff only owes the fees if they win the case or receive a settlement. Moreover, the fees charged by pre-settlement funding companies are usually lower than those of credit cards or payday loans.
3. Pre-settlement funding is only available for certain types of cases.
Some people believe that pre-settlement funding is only available for personal injury cases. In fact, pre-settlement funding is available for a wide range of cases, including medical malpractice, wrongful death, product liability, and employment disputes. The funding amount may vary depending on the strength of the case and the potential settlement or verdict.
4. Pre-settlement funding is a sign of desperation.
Another common misconception is that plaintiffs who seek pre-settlement funding are desperate and have no other options. While it’s true that some plaintiffs may be facing financial hardship due to lost wages or mounting medical bills, pre-settlement funding can also be a proactive financial decision. By obtaining pre-settlement funding, plaintiffs can avoid taking out loans or using credit cards, which can lead to high-interest rates and debt.
5. Pre-settlement funding is illegal.
Finally, some people believe that pre-settlement funding is illegal or unethical. In reality, pre-settlement funding is a legitimate and regulated industry. However, it’s important to do your research and choose a reputable pre-settlement funding company that follows industry standards and practices.
Pre-settlement funding is a valuable resource for plaintiffs involved in legal cases, but there are many misconceptions about how it works and who it’s for. By understanding the facts and separating truth from fiction, plaintiffs can make informed decisions about whether pre-settlement funding is right for them. Whether you’re wondering if you qualify for pre-settlement funding or you have any questions make sure to check out the rest of our page and contact us. We, at Certified Legal Funding, are happy to resolve any doubts you may have.