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The Truth About Lawsuit Settlement Loans

Lawsuit settlement loans, also known as pre-settlement loans, lawsuit loans or lawsuit funding, have become a popular option for plaintiffs seeking financial support while involved in lengthy lawsuits. These loans are often used to ease the financial burden of waiting for a settlement by providing plaintiffs with quick access to cash without any upfront costs or collateral.

There is controversy surrounding pre-settlement loans, however, with critics arguing that these loans cost too much, that their interest rates can take advantage of the plaintiffs, and potentially unethical practices by funding companies.

Are the critics correct?

We will look at both sides of this argument and give you the truth about lawsuit funding and the parties involved. So, let’s look under the hood at lawsuit loans by discussing the process, the parties involved and offer advice on what to look for when making a decision.

An Oasis in The Desert

Lawsuit settlement loans offer several benefits for plaintiffs. The main benefit, is providing them with the financial support they need to endure long legal battles without the overwhelming debt, comes with waiting for a settlement. Much like a lifeline, a lawsuit loan can keep you financially afloat while your attorney negotiates with the big insurance companies on your behalf. If you have nowhere else to turn for the financial help you need during this difficult time, then a lawsuit cash advance can truly be akin to “an oasis in the desert.”

A Necessary Evil?

This phrase gets thrown around a lot these days, as people try and justify things they do not agree with. “I don’t like it, but it’s a necessary evil” some might say. Well, this has been thrown around about lawsuit funding companies for years. But is this phrase really true, when it comes to pre-settlement loans?

We would argue that this phrase is the furthest thing from the truth. The fact is that there is nothing inherently evil about providing financial assistance to those who are most in need of it. But the people who say this are really saying, a lawsuit cash advance is just too expensive – or at least more expensive than it should be and they take advantage of plaintiffs.

But let’s look at this question in comparison to another practice that is common with personal injury lawsuits.

Would it be considered a “necessary evil” to hire an attorney that will represent you in your injury case, only to take 30% to 40% of the compensation you are awarded for your injury and other losses?

How about in the world of credit cards? Most Americans have at least one or two of them.

Is it a “necessary evil” that a credit card company will charge you two or three times the interest rate of someone else because they have better credit than you?

Is it unfair or evil, that your personal bank will not give you a loan to support your family, knowing you will “probably” receive a settlement and can pay is it back, with interest?

The answer to all of these is, no. It is just the way things are done.

Let’s ask the question another way. Would it be considered a “necessary evil” for a company to provide you with money to pay your bills without the need for a credit check or collateral, and you only have to pay the loan back if you win your case? Yes, there will be interest on the loan, but doesn’t the bank do the same thing, if they would actually do it, I mean?

When you put it that way, it is hard to argue that there is anything bad about a lawsuit loan.

A bank is not going to give out an unsecured personal loan without a credit check and simply on the merits of a pending lawsuit. And they certainly wouldn’t give you a loan like that at their best interest rate. Furthermore, if a bank ever did give out a loan like this, they would definitely want you to pay it back regardless of what happens with your lawsuit.

What about credit card providers? If you got hurt and need money because you are out of work, will a credit card issuer raise your credit limit to give you the money you need to get by? You know the answer to that question is almost certainly going to be no, especially if you have less-than-perfect credit. And if they do say yes, you can be sure that they will not give you a break on the interest rate.

Can you turn to family to loan you money? How about your attorney? He or she knows better than anyone the value of your case, so why can’t they give you a loan and take the repayment out of the settlement?

For most people, these options are nonexistent. And that is why lawsuit loan companies exist today. Born out of necessity, when plaintiffs had no one else to turn to, lawsuit loan or pre-settlement loan companies, at great risk, came to the rescue.

Advantages of Pre-Settlement Loans

Access to Funds

One of the main benefits of loans for lawsuit settlement is quick and easy access to funds that they can use to pay bills immediately. Unlike traditional bank loans that can take several days or even several weeks to approve, a lawsuit cash advance can be approved, and funds can be in your bank account within a matter of hours.


Another advantage of pre-settlement loans is the flexibility they offer. Borrowers can use the funds for anything, without restrictions.

Non-Recourse Funding

As we touched on earlier, pre-settlement lawsuit loans are “non-recourse”. This means the loan is tied to the outcome of the case. If the plaintiff loses the case, he/she is not responsible for

paying back the loan. If s/he wins the case, the repayment comes from the settlement under the predetermined terms and conditions.

This is a significant benefit as it reduces the risk for borrowers and protects them from incurring more debt in case of an unfavorable outcome. With non-recourse funding, plaintiffs can pursue their case with peace of mind, knowing that they will not be held personally responsible for the loan in case they do not win.

No Credit Check

Unlike traditional loans, pre-settlement funding does not require a credit check. This means that plaintiffs with poor credit scores can still qualify for a loan. Lawsuit funding companies base their decision on the merits of the case, rather than the plaintiff’s credit history. This is a significant advantage for individuals who may have credit challenges.

No Collateral Required

Lawsuit settlement loans are unsecured loans, meaning they do not require collateral. This is the direct opposite of most traditional loans that require borrowers to put up collateral, such as a home or car, as a form of security.

Strengthens the Legal Claim

Lawsuit settlement loans can provide plaintiffs with additional leverage during negotiations and help to strengthen their legal claim. Personal injury cases are often drawn out for months or even years. Insurance companies know the longer they can delay a payout, the more likely a plaintiff is to give up because of financial pressures and opt to settle the case. This financial pressure makes it more likely that a plaintiff will be tempted to accept a settlement offer – even if it is far lower than what their claim is actually worth.

By taking out a pre-settlement loan, the plaintiff has the financial relief they need to wait for a better settlement offer or take the case to trial if necessary. This puts their attorney in a better negotiating position and makes it far more likely that they will be able to secure the settlement that the plaintiff deserves.

The “Perceived” Downfalls of Lawsuit Loans

While pre-settlement loans offer several benefits, they also have some potential drawbacks, depending on the individual circumstances of the plaintiff. The following are some of the possible disadvantages of lawsuit settlement loans:

Higher Costs

One significant misconception of pre-settlement loans is that they can be considered expensive. In reality, they are not expensive at all.

These are non-recourse loans, which means the lender cannot collect anything if the plaintiff does not win his or her case, they are considered high-risk. As a result, the interest rates and

fees associated with lawsuit loans can be higher than traditional loans but lower than credit card companies in a lot of cases.

The value of the loan amount is also not as easy to assess. For example, if your case is worth $50,000, according to your attorney, then you may be able to get a $10,000 loan. But what if your attorney is wrong or maybe he was just hopeful?

What if your case is really only worth $25,000? Your attorney is still going to get his 30% to 40%, so you are at around $15,000. And what about the expenses of the case? That may be another $5,000.

That leaves you with only $10,000, which will not even cover the interest on the loan. So, as you can see, lawsuit loan companies carry ALL of the risk when it comes to these transactions.

In fact, because of the enormous risk with these cases, there have been several lawsuit funding companies that have gone out of business in recent years.

Ethical Concerns?

A lot of law firms will tell their clients to stay away from lawsuit loan companies out of ethical concerns. But who are they protecting?

Are banks ethical? Are law firms ethical when they take up to a 40% take of your settlement? As we mentioned, they aren’t going to give you money, banks aren’t going to loan you money, and friends and family don’t want to see you coming, so where are you going to turn when the medical bills pile up and the creditors keep calling?

All your attorney will tell you is “just hold on a little longer, a settlement is coming”. But in the meantime, how are you supposed to put food on the table?

Some lawsuit funding companies have been accused of exploiting vulnerable plaintiffs and charging excessive interest rates and fees. This may have happened; just like in any industry, there are always a few bad apples.

There are plenty of reputable lenders out there as well, and it is important for borrowers to do their due diligence. Look at reviews and talk to different lenders to find the right one for you.

Is a Pre-Settlement Lawsuit Loan Right for You?

While pre-settlement loans can be a helpful financial tool for plaintiffs, they also come with some potential concerns, the most important being the fees associated with the loan.

Maybe you have family members or friends who are willing to lend you the money you need at zero interest or with minimal interest. If that is an option for you, then take the money and don’t bother applying for a loan.

Maybe you own a home, or you have a sizable retirement account that you can borrow against. If these resources are available to you at a lower cost than what is associated with a pre-settlement loan, then you might want to go that route.

You should keep in mind, however, that a secured loan puts your collateral at risk if you are unable to make the payments while you are out of work because of your injury. There are no monthly payments with a lawsuit loan, and as we have talked about, the funding is secured by the eventual settlement or verdict from your lawsuit. So if, for any reason, things go south and you lose your case, you won’t have to pay anything back.

The bottom line is that everyone’s circumstances are unique, and you need to weigh all of the specific factors that apply to your situation before deciding if a pre-settlement loan is right for you. Consider all of your available funding options, and if you have any questions about lawsuit loans, we are here to help answer them. Feel free to call us anytime at 866-941-5588 to discuss your situation and/or to start the application process.

PG&E California Wildfire Lawsuit Loans

On July 13, 2021, a fire began in Northern California in the Feather River Canyon near the Cresta Dam in Butte County. Later named the “Dixie Fire”, it went on to become the second-largest fire in recorded California history. The Dixie Fire raged for 3 ½ months, burning nearly one million acres across five counties and leaving several towns and communities damaged or destroyed in its wake.

The Dixie Fire destroyed more than 1,300 homes in Northern California, costing an estimated $1.15 billion in repair costs alone. As staggering as this figure is, the cost to repair the physical damage is only a fraction of the untold emotional damage that was inflicted on area residents.

One person was killed, and countless others suffered severe burn injuries and other types of injuries from the fire. On top of all this, hundreds of families had their homes and lives uprooted and had to relocate while everything was being rebuilt.

An investigation by the California Department of Forestry and Fire Protection (CALFIRE) found that Pacific Gas & Electric (PG&E) was responsible for the Dixie Fire. It was determined by investigators that the massive fire was sparked by a tree that fell on electrical distribution lines that were owned and operated by PG&E.

Pre-Settlement Funding for PG&E California Wildfire Lawsuit

If you or someone close to you is involved in litigation against PG&E for their role in causing the Dixie Fire or any other California wildfire, you should not have to wait several months or longer for the compensation you need to help rebuild your life!

Lawsuit cash advances are available through Direct Legal Funding, one of the nation’s leading pre-settlement loan providers. Receive an advance on your lawsuit settlement in his little as 24 hours to cover expenses such as:

  • Temporary relocation costs
  • Medical expenses
  • Repairs of damaged or destroyed property
  • Mortgage payments
  • Business interruption losses
  • Daily living and other personal expenses

Our low-interest pre-settlement loans are non-recourse, meaning that you only have to pay back the loan if you receive a settlement or favorable court judgment.

Widespread PG&E-Induced California Wildfires

Sadly, the 2021 Dixie Fire is far from an isolated incident. California has been ravaged by wildfires in recent years, and according to CAL FIRE, there has been an average of 7,140 fires and an average of 2,094,293 acres burned each year for the past five years.

PG&E has been implicated in a significant number of recent California wildfires, and in many cases, settlement funds have already been set up to compensate fire victims. However, those affected by a PG&E-induced wildfire need to either join an ongoing lawsuit or file one of their own.

If you or someone you know was impacted by either the Dixie Fire or another California wildfire that happened recently and you are not yet part of any litigation, we strongly advise that you speak with an attorney as soon as possible to discuss your legal options.

Here are some of the recent California wildfires in which it has been determined that PG&E was the cause:

  • The 56,000-acre Zogg Fire which started in Shasta County in September 2020.
  • The 77,000-acre Kincade Fire that started in Sonoma County in October 2019.
  • The 153,000-acre Camp Fire that started in Butte County in November 2018.
  • The October 2017 “Fire Siege” that burned more than 107,000 acres across several Northern California counties.
  • The 36,000-acre Tubbs Fire that burned parts of Napa, Sonoma, and Lake counties in October 2017.
  • The 70,000-acre Butte Fire that started in Amador County in September 2015.

In these and numerous other California wildfires, the root cause of the fire was some type of PG&E electrical equipment failure. Although PG&E has been determined to be negligent for these fires (and in some cases “grossly negligent”), lawsuits against utilities always involve a number of complicated factors.

Plaintiffs will often need to wait for a significant period of time before they receive their settlement funds while PG&E needlessly drags out the process. In the meantime, the bills keep coming in and the cost to rebuild their lives continues to add up.

Receive a Pre-Settlement Litigation Loan for Your PG&E California Wildfire Lawsuit

If you are one of the countless individuals and families that have had their lives turned upside down by a California wildfire that PG&E was responsible for, Direct Legal Funding can help put you back on solid financial ground while your case is ongoing. With our PG&E lawsuit cash advance, you can experience peace of mind knowing that your short-term financial needs will be taken care of while you wait for your final settlement from PG&E.

Our pre-settlement funding process is quick and easy. There are no credit checks, and there is no collateral required. As we talked about earlier, our lawsuit loans are non-recourse, and once you receive your advance funding, you will not have to stress about paying it back because the repayment will come from the settlement funds that you eventually receive.

Here is a general overview of our low-interest lawsuit loan process:

  • Fill out our online application.
  • We will request relevant documents from your attorney pertaining to your PG&E lawsuit.
  • Our underwriters will review the documents provided by your attorney.
  • We will set up a brief conference call with your attorney to discuss your case and gain any necessary clarifications.
  • Once your lawsuit funding application is approved, we will draft a contract and send it to you for your signature.
  • After the contract is signed by you and your attorney and returned to us, you will receive your lawsuit cash advance usually within 24 business hours. This is typically done via wire transfer or overnight check.

We work hard to provide an advance on your lawsuit settlement as quickly as possible. However, delays can happen; and when they do, it is typically because we are waiting for some or all of the necessary paperwork from your attorney and/or waiting for your attorney to set up a time to speak with us.

All that said, most attorneys understand the need for their clients to receive their funds as soon as possible, and they are usually willing to work with us.

Get a Pre-Settlement Loan for Your PG&E California Wildfire Lawsuit from Direct Legal Funding

At Direct Legal Funding, we offer low-cost lawsuit loans with the most competitive interest rates in the industry backed by our dedicated customer service. Our loans are risk-free and collateral free with fast turnaround times – usually within as little as 24 business hours.

Apply online or call us today at 866-941-5588 to get started. You can also reach out to us to learn more about how we can help you.

Construction Accident Lawsuit Loans in Brooklyn

Each year a large number of construction workers suffer from a personal injury in Brooklyn, New York. The construction industry provides direct or indirect employment to millions of people. Based on this, working on a construction site remains one of the most dangerous jobs in the US, with more than 150,000 construction accidents taking place each year.

It may makes sense to take a lawsuit cash advance on your construction injury, as it may take time to legally obtain a settlement. During the intervening period, your bills are going to pile up, so why not use the money you have coming to you?

How to receive construction accident lawsuit funding in Brooklyn, NY?

Getting access to a lawsuit cash advance in Brooklyn, NY can be a hassle-free process as long as you work with a highly rated legal funding provider. You just need to complete an online application form at the pre-settlement funding provider’s website. Their team will quickly review your application. Once you are approved you and your attorney will be sent an agreement to sign, after the contract has been signed by both you and your attorney your money will be released. This process generally takes less than 24hours.

New York laws regarding lawsuit loans

In New York, lawsuit loans are often called pre-settlement funding. They are completely legal and are considered a non-recourse type of loan. That means the future settlement is used as collateral on the loan. In case you do not win the settlement, you do not have to pay anything to the lawsuit loan company.

New York not only allows settlement loans but also has laws that protect construction workers from risk. New York labor laws require construction companies to inspect every site and implement safety measures. The New York State Bar Association stipulates that attorneys are not allowed to provide funding to the plaintiff directly. However, they may assist their clients to obtain a lawsuit cash advance from third parties.

Past cases in New York related to construction injury

A recent case involved a construction worker in the Bronx, NY who suffered wrist injuries on account of a defective saw that did not have a safety guard. The accident left the victim with several lacerated tendons on the left hand, which resulted in CRPS or Complex Regional Pain Syndrome. The client received a settlement of $11,500,000.

In another case, a construction worker fell off a slippery dump truck ladder and was left impaled on an uncapped vertical bar. The victim received a $3,975,000 settlement.

Statistics on accidents and injuries in New York

The fatality rate from construction accidents is higher in New York compared to the national average. In 2020 alone, construction-related deaths accounted for 22% of all worker deaths in NYC and 24% of all worker deaths in New York State. The national average is 21%. These statistics are as per a report from the New York Committee for Occupational Safety and Health.

According to the New York City Health Department Bureau of Vital Statistics, fall accidents comprised 58% of all fatal construction worker injuries between 2007 and 2014. Falls from scaffolding contributed to 25% of the deaths, while ladder falls contributed 16%, and falls from roofs contributed to 11% of deaths.

The average time it takes to get a lawsuit loan in Brooklyn, NY

A lawsuit cash advance is much easier to get compared to a car loan or a home mortgage. Since this is not a traditional type of loan, the process is quicker. There is no need for a credit check or any financial assets. Once you make an application to the lawsuit loan company, the team reviews your application. If approved, you can get the money in 24 to 48 hours on average.

Factors that could cause lawsuit funding approval to take longer than usual

Usually, lawsuit funding may take anywhere from one to two days. Furthermore, in some cases, it can take longer. These include factors such as:

  • Complexity: Some cases such as motor accidents or slips and falls are processed quite routinely and quickly. But other cases may be more complex in nature, such as ones that include product liability. The risk factor needs to be evaluated in such cases to make a proper assessment.
  • Lack of information: Getting information about a case quickly and efficiently plays a big role in how quickly you can receive the lawsuit loan. If sufficient information about the case is not provided, it can cause delays.

Factors that can expedite the lawsuit loan approval process in Brooklyn, NY

  • Providing all the necessary documentation related to the case is critical to quick approval.
  • Providing documents such as incident reports, medical reports, and insurance information, are critical.

Names of hospitals/medical centers in NY

If you have suffered a construction accident, then timely medical aid is essential. You can receive proper medical treatment from any of the major hospitals located in NY. Some of the prominent hospitals and medical centers in NY include North Shore University Hospital, Montefiore Medical Center, Long Island Jewish Medical Center, and University Hospital at Stony Brook.

The cost of healthcare in Brooklyn, NY

The per capita healthcare spending in New York ranks among the highest in the US. Private healthcare spending has grown faster compared to public healthcare spending. The state’s healthcare expenditure runs into hundreds of billions of dollars every year.

In recent decades, healthcare costs have exponentially increased in New York. Health spending is projected to be the second largest segment in the state budget, after education. In the last decade alone, the cost of employer-sponsored family health insurance in the state increased by 92%.

Reach out to Direct Legal Funding for quick, easy, and affordable pre-settlement loans in Brooklyn, NY

Construction accidents are a major cause of deaths and injuries in Brooklyn, NY. If you or someone you love has sustained a construction-related injury, getting the rightful settlement can be a painful and tedious process. In the meantime, you would have to deal with medical bills, and house-related expenses, not to mention the painful process of recovery.

Receiving the settlement amount can sometimes take months or even years. Instead of waiting interminably for that amount to come through, you can choose a lawsuit loan to meet your expenses.

At Direct Legal Funding, we offer low-interest pre-settlement funding in as little as 24 hours, and we do not require any credit checks. If you do not win the settlement case, you do not need to pay us anything. The process of application is easy. So, get started today by applying for a loan online, or give us a call at 866-941-5588.