There are two types of settlement funding, pre-settlement funding, and post-settlement funding. Pre-settlement funding is when a person who has been injured and filed a personal injury lawsuit receives advance funds to help fund the suit or their living expenses, in anticipation of the settlement of their lawsuit.

Often pre-settlement funding will be advanced by the plaintiff’s attorney because their client has extraordinary expenses which they need to satisfy.

Pre-settlement funding may also be offered by a third-party settlement funding agency, such as an insurance agency or an actual “settlement funding office”. In such a case, the funding office is essentially acting as a loan broker, and will be paid the loan amount plus interest out of the settlement, and the plaintiff is trading their future settlement for a lesser amount up front.

When attorneys provide pre-settlement funding to their clients, according the rules of many states and some case law, they may not charge interest…

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Tags: pre-settlement funding, post-settlement funding, settlement funding