Frequently Asked Questions
- How does pre-settlement funding and post-settlement funding assist law firms?
- How does litigation financing, litigation funding or legal funding work?
- How can litigation financing be used?
- Who is eligible for litigation financing?
- What types of cases are eligible for the litigation funding?
- What stage of litigation do the cases need to be in order to be considered?
- Are there restrictions on how the funds can be used?
- How and when does USClaims receive its purchased portion of the proceeds?
- What is ALFA?
- How long does it take to get cash?
- How much am I eligible for?
- How do I apply for litigation funding?
- Is a settlement funding the same as a bank loan?
- What are the fees associated with litigation funding?
- What if we lose our case – do we still have to pay you back?
- When do I have to pay the money back?
- Do I need to have an attorney to be eligible for litigation funding?
How does pre-settlement funding and post-settlement funding assist law firms?
Pre-settlement funding and post-settlement funding provides financial security to plaintiffs involved in personal injury, whistleblower, medical malpractice or railroad employee lawsuits. Often, plaintiffs in these matters will be unable to work and eager to settle, as they worry about losing their homes, paying their bills and managing day to day expenses.
Pre-settlement funding and post-settlement funding removes the financial burden from plaintiffs, allowing their attorneys to fight for a fair settlement for them. The plaintiffs are better able to withstand what is sure to be a long litigation process, and plaintiffs’ lawyers working on a contingency fee basis are able to benefit by negotiating a larger settlement. The larger settlements not only benefit attorneys financially but also by reputation, as attorneys who successfully negotiate large settlements for their clients receive future business from the client as well as referrals.
How does litigation financing, litigation funding or legal funding work?
Litigation financing, litigation funding or legal funding – pick your preferred term – works like this: a plaintiff with a personal injury, workers compensation, qui tam, medical malpractice, or FELA lawsuit pending applies for a settlement funding. One of our representatives at USClaims will review the application, and once we approve it, we’ll send a purchase agreement and forward the funds to the plaintiff within 24 hours.
How can litigation financing be used?
Litigation funding can be used by the plaintiff to pay day-to-day expenses, like rent, utilities, groceries and other living expenses. Industry statistics show that 62 percent of settlement fundings are used to stop foreclosure or eviction actions. Without litigation funding, many plaintiffs would find themselves homeless, have to pull their children out of college, or have their vehicles repossessed.
Who is eligible for litigation financing?
Anyone who is involved in a personal injury lawsuit with a mature claim is eligible for litigation financing. This means that the plaintiff is seriously injured, has a lawsuit with strong merits against the defendant, and is represented by an attorney on a contingency basis.
What types of cases are eligible for the litigation funding?
Cases that are eligible for the litigation funding include medical malpractice claims, premises and slip and fall claims, workers related matters, qui tam or whistleblower lawsuits, railroad employees and FELA claims, auto accidents and medical malpractice lawsuits.
What stage of litigation do the cases need to be in order to be considered?
In order to be considered for litigation funding, the plaintiff needs to have retained an attorney, and to have filed a lawsuit or (will soon be filing a lawsuit) in the applicable court of law.
Are there restrictions on how the funds can be used?
Pre-settlement funding and post-settlement funding carries no restrictions on its use and can be used for personal expenses like housing, food, medical bills, tuition, business costs, and utilities.
How and when does USClaims receive its purchased portion of the proceeds?
When the plaintiff receives a settlement or a favorable judgment in the lawsuit. USClaims collects directly from the proceeds of the settlement. Litigation funding does not need to be repaid if the plaintiff loses the case.
What is ALFA?
ALFA stands for the American Legal Finance Association, which sets the standard for litigation funding, pre-settlement funding and post-settlement funding companies. With 31 members, it establishes the highest ethical standards and fair business practices for the industry, and its members provide non-recourse legal funding throughout North America.
How long does it take to get cash?
Once your application is approved and the purchase agreement accepted, you’ll receive your settlement funding in less than 24 hours.
How much am I eligible for?
The typical plaintiff applying for and receiving a settlement funding is eligible for approximately 10 percent of the value of the case, which can vary depending on the injury sustained. We work with your attorney to determine the best plan for you.
How do I apply for litigation funding?
Applying for litigation funding is simple. Fill out the form on our website to get started. We’ll ask you a few questions about your case and your attorney to get the ball rolling.
Is a settlement funding the same as a bank loan?
A settlement funding is different from a bank loan. The biggest difference is that you don’t have to pay back a settlement funding if you lose your case, whereas with a bank loan, you must pay back the loan amount.
Additionally, bank loans typically require monthly payments. A settlement funding does not; it is repaid directly from your settlement.
Finally, a settlement funding differs from a bank loan in that bank loans are typically granted based on employment status, credit history, or assets. Litigation funding companies do not look at these factors when considering an application for a settlement funding; rather, litigation funding companies look at the merits of the case, the likelihood of success, and the amount of the potential settlement.
What are the fees associated with litigation funding?
Depending on the amount of the settlement, litigation funding requires a fee to be paid out of the settlement. This is calculated on a case-by-case basis. We have some of the lowest rates in the industry. Other companies may offer services that resemble our pre-settlement funding options, but USClaims prides itself on offering low rates and fees with no hidden surprises.
What if we lose our case – do we still have to pay you back?
Because litigation funding is a non-recourse method of financing, if you lose your case, you do not have to pay back the funding. The only reason why you would be required to pay back a funding is if you provided false information, committed fraud or breached the purchase agreement.
When do I have to pay the money back?
Once you receive a settlement, in our purchase agreement you will instruct your attorney to pay USClaims it’s purchased amount so you don’t have to worry about writing a check to USClaims.
Do I need to have an attorney to be eligible for litigation funding?
Because of the nature of litigation funding, you do need to have an attorney to be eligible for pre-settlement funding. We work closely with your attorney to find the best plan for you, and your attorney will provide a guideline regarding the amount of your expected settlement and the value of your case, which we base our settlement funding amounts upon.
Pre-settlement funding for your personal injury claim
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