One of the most common questions that people ask is if their lawyer can deny them from getting a pre-settlement loan. Learn the answer in our latest blog!

June 22, 2021

One of the most common questions that people ask us is whether or not their lawyer can deny them from getting a pre-settlement loan. The short answer is that they can, in a way, because they need to provide information in order for you to be considered for this type of loan. In order to answer this question fully, we’ll look at what pre-settlement loans are, why a lawyer’s approval is required, and how/why they could deny you.

What Are Pre-Settlement Loans?

If you are injured in an accident that was caused by someone else’s negligence, you may incur extremely high medical bills and other costs that could leave you in massive debt. All of the sudden, and by no fault of your own, you may be struggling to pay for treatment, groceries, rent/mortgage, and other expenses. A lawsuit can help you get monetary compensation for your injuries, but lawsuits can take months or even years to resolve; when you need cash now, many people turn to pre-settlement loans for help.

A pre-settlement loan (also known as a lawsuit loan, lawsuit cash advance, or pre-settlement funding) is money given by a private lender to injured plaintiffs whose lawsuits are pending, intended to help them stay financially afloat while they wait for their settlement. They don’t have to pay anything back to the lender if they lose their case; if they win their case, the lender is repaid directly out of their settlement.

Why Attorneys Are Required For Getting A Pre-Settlement Loan

No pre-settlement loan lender would give money to a plaintiff who doesn’t have an attorney representing them. Remember that they only get repaid if you win your case. Because their repayment is contingent on the case’s outcome, and not having a lawyer representing you will dramatically decrease your chances of recovering a settlement, pre-settlement loan lenders will not take a risk on you if you have no attorney.

An attorney is also required for credibility purposes; because lenders are assuming a risk when they pay you, they need to know that you really have a case. Anyone can make up details about their injuries. With National Lawsuit Funding, medical documentation isn’t even required, so the only way to prove your story is by consulting your attorney to request specific details about your case.

While seeking a pre-settlement loan is ultimately up to you, your lawyer’s cooperation is required to be approved for the loan, so they can basically deny you from getting a pre-settlement loan if they do not respond to requests for information.

Reasons Your Lawyer Would Deny Your Pre-Settlement Loan

Lawyers might deny your pre-settlement loan for a few reasons, though it is generally in their best interest as well to approve you (for reasons discussed below).

The most common reason that your lawyer might deny your pre-settlement funding request is because it is too early in the case. Attorneys familiar with these types of loans know that an important factor in whether or not a lender will approve you is having a certain amount of evidence and documentation in place, and they may not have that yet.

Another reason could be that you have too much funding from another lender; you can apply for multiple loans, but an attorney can estimate the value of your case; they may believe that the interest you are paying won’t be worth what you are going to receive once the loans come out of your settlement.

Yet another reason could be that pre-settlement funding is not available in your state and your lawyer is simply trying to prevent you from wasting your time.  

However, if a lawyer denies your pre-settlement loan without giving you a reason, there may be something else going on.

Incentives For Lawyers To Approve Your Pre-Settlement Loan

Insurance companies know that accident injuries are expensive and that many injured accident victims are desperate for cash; that is why they will often throw out a quick, lowball offer to see if the plaintiff accepts it. Insurance companies lose money when they pay out claims, so it’s in their best interest to offer you as little as possible (this is the main reason why injured plaintiffs enlist the help of an attorney in the first place). As the bills start mounting, some plaintiffs are tempted to simply accept that quick offer, even though it is much less than what they truly deserve, because it will take time for their lawyers to negotiate with the insurers and get a higher settlement.

Personal injury lawyers are paid out of a percentage of your settlement. If you accept a low settlement, they make less money, so it is in their best interests to get you the highest amount possible for your injuries; playing hardball with the insurers, though, can take months or even years, especially if your attorney thinks that going to trial is going to be the best way to get you the highest settlement. It’s going to be better for them, in the long run, if you are able to be patient and let them do their job.

That’s the main benefit of pre-settlement funding. It gives you the cash you need now to be able to pay your bills and wait for your lawyer to get the highest offer. For these reasons, most lawyers will want to approve your pre-settlement loan, if you apply for it; it will likely help them make more money off of your case (at no detriment to you - you will win more as well)!

What To Do If Your Lawyer Denies Your Pre-Settlement Loan

If your lawyer denies your pre-settlement loan by refusing to cooperate with you and with the lender, you do have a few options.

If you feel that your lawyer is unfairly and unreasonably denying your pre-settlement loan, then you can always seek the help of another lawyer; most contracts allow you to terminate your agreement with the lawyer on your case, though you may have to pay some legal fees in order to do this. Read your contract carefully and have an honest conversation with your lawyer; it is desirable to make this process as cordial as possible and leave the relationship on good terms in case you need their guidance or assistance in the future.

There are also other, alternative sources of funding available, though not all of them may be right for your specific case and none of them work as quickly as pre-settlement funding. There are bank loans, asset-based loans, credit card funds, or borrowing from family and friends. You should research these options carefully and discuss them with your lawyer or financial advisor before pursuing them.

Getting Pre-Settlement Funding From National Lawsuit Funding Is Easy & Fast!

Since 2001, National Lawsuit Funding has helped thousands of plaintiffs get cash advances ranging from $500 to $25,000 in less than 24 hours! We don’t require any medical documentation. All we need to fund you is five minutes of your time, five minutes of your attorney’s time (via phone call or email) and that’s it - we can send you a direct deposit or check as soon as we get the information about your case that we need.

If you have been injured in an accident, have a lawsuit pending, and need cash now, apply or contact us today to get started!