Is settlement funding good or bad?  I believe that settlement funding, also known as settlement loans or lawsuit loans, is needed.  It can certainly be a good thing when used correctly.  However, it can also be terrible when a bad settlement funding company is involved.

When should settlement loaned be used?   Settlement loans should only be used when a client faced financial ruin and can’t pay his or her bills from any other source.  The problem is that injured people who can’t work normally don’t  qualify for bank loans.  This means that settlement funding companies often are their only source of relief available.

Is settlement funding a loan?  Even though settlement funding is often referred to as a settlement loan or lawsuit loan, it is not actually a loan at all.  Instead, it is an assignment of some of the proceeds of your future injury settlement to the settlement funding company in exchange for cash now.  This means that settlement funding is based on the value of the underlying injury claim rather than on the credit rating or monthly income of the applicant.

Why do some people dislike settlement funding companies?  The people who dislike settlement funding companies often dealt with one of the following:

  • They dealt with a settlement funding company that was too slow in providing the funds.
  • They dealt with a settlement funding company whose rates were too high.
  • They borrowed too much money making it difficult to repay from the future settlement.
  • They underlying injury claim took a long time to settle resulting in a higher payoff of the loan.

What are the keys to avoiding a settlement funding nightmare:  PAIN LAW has seen many problems arise with injured personal injury claimants who didn’t follow the following recommendations:

  • You should only deal with the settlement funding companies that are fair.  You can call us at 877-PAIN-LAW (877-724-6529) for recommendations.
  • You should try to borrow as little money as possible since this type of funding can be expensive if your case takes a long time to be resolved.
  • You should settle your injury case quickly if the offer is reasonable.  This will keep the cost of the settlement advance down since these fees increase over time.

How can settlement loans or lawsuit loans help?  It can help provided needed funds when injured people need financial help until their case can be resolved.  People who are badly injured often can’t work for a period of time.  Their paychecks stop, but their bills keep coming in.  This means that in no time the person injured in a car accident or other type of accident is often facing eviction, repossession, foreclosure, or other collection pressures.  Settlement funding can put out the fire and let you catch up on your bills while you wait for your injury claim to be settled.

Is settlement funding expensive?  It can be expensive especially if your injury case takes a long time to resolve.  Settlement funding is a non-recourse transaction.  Non-recourse transaction means that you don’t repay the settlement loan if you lose your underlying injury claim.  This means that the settlement funding company bears a higher risk of not being repaid since it the repayment is contingent upon you winning your injury claim.  Settlement funding also has the advantages because there are usually no credit checks, no income verifications, and no monthly payments to repay the loan.

What is an example of settlement loans helping?  Attorney Richard Griffin had a recent personal injury client that was badly injured and required a spinal injury.  Each month he needed about $1200 to keep a roof over his head, food on the table, and his bills paid.  Luckily, the Griffin Law Firm represented him for a very good auto accident personal injury claim so the case had a high settlement value.  The client was about to lose everything unless he could get $1200 per month for about 8 months.  The settlement funding gave personal injury attorney Richard Griffin and his PAIN LAW attorneys the time they needed to recover the full policy limits of $350,000.00 for this client.  This incredible recovery wouldn’t have been possible if the client was forced to settle quickly due to the financial pressure of facing eviction and auto repossession.

Settlement Funding Recommendations:  Attorney Richard Griffin at 877-PAIN-LAW makes the following recommendations about settlement loans and lawsuit loans:

  • Do not apply for settlement loans unless you face financial ruin and have no other options.
  • Do not apply for more than the bare minimum money that you absolutely need.
  • Consult with your injury attorney when deciding which settlement funding company to use.

Free Consultation:  Attorney Richard Griffin of will gladly provide a free consultation for your personal injury, worker’s comp, or social security disability claim if you call us at 877-PAIN-LAW (877-724-6529).

Settlement Funding Company Recommendations:  We can also help you find a settlement funding company that best meets your needs.  We can also help you avoid settlement funding company scams.  Since we have worked with almost all of the major settlement funding companies, we can provide a settlement company review so you can know the best settlement funding companies for you to contact.