Getting a Pre-Settlement Loan | Delta Lawsuit Loans

Get cash today

Our Blog

Read our latest news and updates.

Can My Attorney Stop My Pre-Settlement Loan?

One of the most common questions we are asked is if a plaintiff’s lawyer can stop them from getting pre-settlement funding loans.

That’s a very complicated question because they should not be able to stop you. But they technically can. Let us explain.

When a plaintiff has a car accident or a slip and fall the case belongs to the plaintiff.

It is technically considered an asset that you own. The attorney’s job is to represent you in this asset to make it as valuable as they possibly can.

Therefore, given that it is your asset, you can do with it whatever you wish.

For example, if you need money now, and would like to sell a portion of the asset to a funding company, it is your right to do so.

This is where it gets tricky. Companies will not provide pre settlement loans unless the attorney signs a lien acknowledgment.

What that essentially says is that the attorney agrees to pay the funding company the amount that is due when the case does settle.

If they refuse to do so, the pre-settlement funding company will not release funds as they need to be ensured that they will be paid back.

There are several reasons why attorneys might be against it. Below are just some examples of their valid concerns.

They simply do not understand how it works.

Although the concept of pre-settlement lawsuit loans have existed for decades, there are many attorneys that do not understand it.

They believe that now that we are an investor in the case, we will start dictating terms to the attorney about what to do in a case.

In fact, we do not and that would be against the law. We clearly stipulate in our pre-settlement funding agreements that we will not be involved in the case at all.

They believe that pre lawsuit loans will hinder their ability to settle the case.

Suppose Delta Lawsuit Loans advances you pre-settlement funding for $5000.00 in your case.

A year later, the client owes us $6,500.00 and the case has an offer to settle for $20,000.00. The attorney then proceeds to present you with the current offer.

He takes his third which is approximately $7,000.

He then needs to pay your medical bills of 5,000.00 and pay us what is owed which is $6,500. What is left for you is only $1,500. He is concerned that after all you have gone through, all you are left with is a measly $1,500.00 and that you will “forget” that you got pre settlement funding from us against the case.

Very often clients will refuse to settle. If they do, and the insurance company will not give more money the attorney will never get paid for all the work he has done for you.

They hear the “interest rate” is very high for pre settlement funding and believe that they are protecting the client.

They obviously are not. What they may not realize is that the pre-settlement funding loans are non recourse advances.

What that means is that it is not actually a loan on your case rather it is an investment in your case. Therefore, if you don’t win your case you do not need to pay us back.

The real issue is not if your lawyer can deny you pre-settlement funding. They cannot and should not. Remember, it’s your case.

But if your attorney has concern about pre settlement funding loans, it is very important that you educate your attorney on the concept.

It is important that you address what their underlying concerns are with pre-settlement funding.

Loan settlement - Delta Lawsuit Loans

Let’s take the three examples given above of concerns they may have.

Explain to them that the pre settlement funding company is simply giving you the advance and will not take part in your lawsuit whatsoever.

They need to understand that the pre-settlement funding company will not have any input whatsoever or partake in any settlement negotiation, the amount and timing of the settlement, approval of settlement, and/or any pre-trial or trial strategy or techniques.

These matters will be wholly the responsibility of you and your attorney.

It is very important that your attorney understand that you “get” the fact that you are taking your settlement money early and will not forget about the money you are receiving now when it comes time for settlement.

When reaching out for pre-settlement funding, it is usually because you really need the money now and cannot wait for the case to settle.

Explain to the attorney of your current financial situation and the fact that you cannot afford to wait nor do you want to instruct him to settle early causing then to settle the case for less than it is worth.

Usually, when you explain your current financial situation to your attorney, they understand and will agree for you to proceed. They also understand that it is your case and your decision to make.

Your attorney does have a valid point that the “rate” is high compared to a conventional loan. Or any loan.

However, this is not a loan. The fact is that if you lose your case, the pre-settlement funding company loses all of its money.

In the example given earlier, if they advance five thousand dollars and for some reason you lose your case, that five thousand is completely lost. Every penny.

The industry average is that cases lost are between five and six percent. That is a lot of money to lose in cases. That is why this is considered expensive money. However, if you need the money for your rent, a car payment or any day to day living expenses, your attorney should understand the importance of it and will sign the lien acknowledgement.

best pre settlement funding

The Starting Point

The aforementioned examples are just some reasons why some attorneys are against their clients taking pre settlement lawsuit loans.

The best way to handle an attorney not wanting you to take the funding is by simply educating them on the concept in general and your case in particular.

If that still does not work, you should encourage the attorney to call the pre-settlement funding company and have a conversation with them.

Oftentimes, that will eliminate any concerns that they may have.


More from Delta Lawsuit Loans
The Current State of Lawsuit Loans During COVID-19
How Legal Funding Can Benefit Your Case


Important: This site makes use of cookies which may contain tracking information about visitors. By continuing to browse this site you agree to our use of cookies.