If you are considering pre-settlement lawsuit funding, you might be concerned about how it will impact the fees you owe your attorney. Understanding this is key to managing your finances effectively while your case is pending.
Pre-settlement funding can offer essential support during this period, but it is important to know how it interacts with your attorney’s fees so you can make informed decisions about your financial strategy. Let’s delve into how pre-settlement funding works and what it means for the amount you will ultimately pay your lawyer.
What is Pre-Settlement Funding?
Pre-settlement funding, also known as lawsuit funding or a lawsuit advance, is a financial tool that provides plaintiffs with fast cash before their case is settled. Legal cases often drag on for months or even years, which can leave you in a difficult financial situation. This funding can be a lifeline if you need help managing expenses like medical bills, rent, or everyday costs. One important thing to know is that this funding is non-recourse. This means you only repay it if you win your case—if you don’t win, you don’t owe anything to your lender.
How Attorney’s Fees are Determined
In personal injury cases, attorney’s fees are usually based on a contingency fee arrangement. This means your attorney is paid a percentage of your final settlement or award, typically between 30% and 40%. This fee is calculated based on the gross settlement amount—the total amount you receive from the settlement or judgment—before any deductions.
No Impact on Attorney’s Fees
Pre-settlement funding provides you with financial support during your case without changing the agreed-upon fees you have with your attorney. Your attorney’s fee remains a fixed percentage of the total settlement or judgment amount, calculated before any other costs, including the repayment of pre-settlement funds.
For example, if your attorney’s fee is 33%, that percentage remains constant regardless of whether you have received pre-settlement funding. This stability ensures that you have financial relief without worrying about additional legal costs, helping you focus on your recovery and ensuring a predictable financial outcome.
Understanding the Impact of Pre-Settlement Funding on Your Net Settlement
Since attorney’s fees are fixed as a percentage of the gross settlement, it is important to consider this when planning your finances. Pre-settlement funding can help you manage immediate expenses, but the repayment of this funding will come from your portion of the settlement.
However, having the financial means to cover your expenses allows you to hold out for a better settlement rather than settling quickly due to financial pressure. This can potentially lead to a higher settlement, offsetting the cost of the advance.
Get Help with Pre-Settlement Funding Today
At Mustang Funding, we understand the financial challenges you may be facing while waiting for your case to settle. We are committed to supporting you through this difficult time by providing transparent, reliable financial assistance. Contact us to learn how pre-settlement funding works and gain the clarity you need to confidently navigate your case.
