Lawsuit Funding FAQs
This page contains some frequently asked and some not so frequently asked questions about lawsuit funding. If your question is not covered here, please call us at the above number to discuss your question. Remember, there is no such thing as a stupid question. Chances are if you have a question we have not already covered here, then it is likely that other people may have the same question. Your question may be one we choose to add to the site so other people can benefit from it.
- What is Lawsuit Funding?
Lawsuit Funding is a cash advance against an expected settlement of a lawsuit. The advance is made before or after your case settles. Some people refer to what we do as a “lawsuit loan”. However, unlike a loan there are no monthly payments, and you owe nothing if your lawsuit case is lost. Therefore, what we do should be thought of as “lawsuit funding” or a “lawsuit cash advance” rather than a “lawsuit loan”.
- What are the basic qualifications for lawsuit funding?
The following are the basic qualifications for lawsuit funding.
- the liability for the incident resulting in the lawsuit must be on someone else (in other words, you cannot have been responsible for causing the accident or situation resulting in the lawsuit)
- there must be insurance from which you will be compensated
- you must have injuries caused by the accident, or have been affected by the incident such that you are entitled to monetary damages from the defendant
- you must be represented by an attorney on a contingency fee basis
- the settlement must go to your attorney before it is paid to you by your attorney
- you cannot currently be in bankruptcy (Chapter 7 or Chapter 13)
- Do I need to have filed a lawsuit to use lawsuit funding?
Maybe. Filing a lawsuit implies that you are getting ready to take your case to trial. Most cases never go to trial. It will depend on the case type whether a lawsuit should have been filed before applying for lawsuit funding. For example, for an auto accident case it is not necessary to have filed a lawsuit if the case can be resolved via negotiation. If settlement negotiations fail, then a lawsuit will be filed. Employment and medical malpractice cases usually require that a lawsuit has been filed and a complaint document has been produced before applying for lawsuit funding. Please contact us to discuss if your case requires that a lawsuit be filed before applying for lawsuit funding. In all cases you will need an attorney representing you on a contingency fee basis.
- What is a “contingency fee” and why must my attorney be working for me on a “contingency fee” basis?
Attorneys usually work on either an “hourly retainer” basis or a “contingency fee” basis. When an attorney works on an “hourly retainer” basis you will make an upfront payment to the attorney from which the attorney will make draws as the attorney performs work for you. You will have to make additional payments to the attorney each time the “hourly retainer” account is exhausted. A “contingency fee” means that your attorney’s fees for legal services are paid from the recovery in your case rather than by payments for hourly services paid directly by you as your case progresses. If nothing is recovered, then your attorney receives no compensation for legal services. The percentage of the settlement that an attorney can receive under a contingency fee relationship can range from 20% to 50% of the settlement. Depending on the details of your agreement with the attorney, you may or may not be responsible for reimbursing the attorney for expenses (toll calls, document copying, expert witness fees) related to your case whether or not there is a recovery in your case. Our underwriters are only paid back when there is a recovery in your case. Therefore, they want the attorney to be in the same position they are. The underwriters want the attorney to have an incentive for winning your case. This protects their investment in your case. If the attorney is being paid by the hour, then the attorney does not have the same incentive to win your case because the attorney is compensated whether or not the case is won.
- Can I get lawsuit funding in my state?
Lawsuit funding is allowed in all states except North Carolina (see the case of Odell v. Legal Bucks). However, some of our underwriters may not do lawsuit funding in other states based on their experience in those states.
- I live in Ohio. Can I get lawsuit funding on my case?
Yes. It became legal to do lawsuit funding in Ohio about August 29, 2008 as the result of a new law.
- Can I get lawsuit funding in Canada?
Possibly. Some of our underwriters will do lawsuit funding on Canadian cases However, they will not do cases in Quebec.
- Do I need to have a job to get lawsuit funding?
No. In fact, many of our clients are unable to work or have lost their jobs because of the injuries from the accident that resulted in their lawsuit. Many individuals with employment cases find it difficult to get new jobs when a possible new employer learns they have an employment lawsuit in-progress.
- Does my credit history affect my ability to get lawsuit funding?
If you are in a bankruptcy proceeding (Chapter 7 or Chapter 13), then we cannot help you. Otherwise, your credit history does not matter. Only the details of your case are used to determine whether you can get lawsuit funding.
- Can I get lawsuit funding on a case involving a minor child?
No. Lawsuit funding is not permitted on cases involving children under 18 years old. We can only advance on the portion of a case involving injury or damages to adults. If your attorney is willing to state in writing that you are entitled significant damages as a result of the injuries to your child, then we may be able to advance on the share of the settlement to which you are entitled. It should be noted that one of our underwriters refuses to do lawsuit funding on cases where a minor is named in the complaint as a plaintiff in the case even if the main injury was not to the minor.
- Are there any restrictions on how I use the money I get from lawsuit funding?
No. The money you get from lawsuit funding is meant to be used to pay your bills that you have been unable to pay due the circumstances brought about by your lawsuit. The advance from lawsuit funding should be used to help avoid such events as foreclosure on your home, eviction from a house or apartment, repossession of a vehicle, and shut off of utility services. However, you can use the lawsuit funding advance funds in any way that you choose.
- Should I payoff my credit cards using the cash from lawsuit funding?
Probably not. In most case the cost of lawsuit funding will be higher than the interest rate you are paying on your credit cards. However, if you are getting collection calls from your credit card companies and these calls are having a negative effect on you, then lawsuit funding may allow you to make payments that may at least temporarily stop the collection calls you are receiving.
- How much can I get from lawsuit funding?
For cases that have not settled yet, the amount that can be advanced is about 10 percent of the value of the settlement as estimated by our underwriter. The settlement value is based on the severity of your injuries, the amount of treatment you have received for those injuries, and the amount of insurance coverage available to compensate you for those injuries. The minimum advance amount is usually about $250. If a settlement agreement has been signed, it may be possible to get an advance of more than 10% of the agreed settlement. Contact us for details.
- Do I have to take my lawsuit funding advance as a single payment?
No. In fact we recommend that you take small monthly advances rather than one large advance, if possible, to reduce the fees you will owe. For example, if you were seriously injured and your case qualified for a lawsuit funding advance of $30,000 to cover your expenses for the next year while you recover, then we would recommend that your take the lawsuit funding advance as monthly payments of $2500 over each of the next 12 months. If your case settles before the year is up, you will not be paying fees on money you did not need.
- I have prior advances from another company, and they won’t advance more on my case. Can I get more money from your company?
Maybe. There is a limit to how much lawsuit funding can be done on any case. In general that limit is 10% of the estimated settlement value of the case. However, each company evaluates cases in their own way and may have limits as to how much they will invest in a single case. Our underwriters will evaluate your case. If they believe the maximum lawsuit funding has not already been done on your case, then an offer will be made to you that includes buying out your prior advances and advancing additional funds to you. In order to determine the “buyout amount”, we will request that you obtain a “payoff letter” from the company to which you still owe money for prior lawsuit funding advances.
- How long does it take for me to get my lawsuit funding advance?
Assuming the underwriter approves your request, the lawsuit funding advance can usually be made in a few days after receiving the documents for your case from your attorney. This also assumes that you and your attorney approve the lawsuit funding agreement from the underwriter. Below is a list of the steps and how long they might take. The steps may take more or less time than that listed.
Do initial screening , take application, request documents from attorney 1 day Wait for attorney to respond with requested documents 1 to ? days Prepare case submission to underwriter once documents are received 1 day Underwriting review 2 days minimum Review funding offer with you and send funding contract to your attorney 1 day Review and approval of contract by you and your attorney, FAX contract to underwriter 1 day Review of signed contract by underwriter-Send check via overnight shipping or do wire of advance to your account 1 day Receive advance check via overnight shipping service 1 day
- Are there any upfront fees required to get lawsuit funding?
For most non-commercial or personal injury cases, all fees are deferred until your case settles. Some commercial (e.g. breach of contract, defamation, fraud, copyright or patent infringement) cases may have a non-refundable fee for due diligence review by an expert in the case law.
- How much is lawsuit funding going to cost me?
There are fees associated with the use of the money you receive from lawsuit funding. There may be a combination of both one-time fees and monthly fees. These fees vary based on the merits of the lawsuit, the length of time it takes to settle the case, and the underwriter providing the lawsuit funding. All fees will be disclosed to you as part of the process to determine whether lawsuit funding can be obtained for your lawsuit. We will always try to get your case funded through our lowest cost underwriter first. However, if they are not able to fund your case, we will try other underwriters if you give us your authorization to do so.
- Do I have to make monthly payments while I am waiting for my lawsuit to settle?
No! Lawsuit funding provides you with a cash advance and is not a loan on your lawsuit. You will pay the cash advance amount plus fees owed for the use of the cash advance only when the lawsuit settles, and then only if their is a recovery in your case. You do have the option of paying the advance plus fees owed back before the case settles, if you choose.
- What types of lawsuits might qualify for lawsuit funding?
The following types of lawsuits may qualify for lawsuit funding.
- Personal Injury
- Car Accidents
- Truck Accidents
- Other Motor Vehicles Accidents (e.g. motorcycle accidents)
- Accidents on public transportation (e.g. train, airplane, ship, bus)
- Pedestrian Hit by a Motor Vehicle
- Bicyclist Hit by a Motor Vehicle
- Premises Accidents
- Theme Park Accident
- Amusement Park Accident
- Carnival Accident
- Ceiling Collapse
- Other Premises Liability Cases (e.g. safety and security-related incidents)
- Toxic Mold
- Mesothelioma/Asbestos Lawsuit
- Medical Malpractice
- FELA (Railroad Worker Claims)
- Jones Act (Seaman Claims)
- Construction Accidents
- Slip/Trip and Falls
- Workers’ Compensation
- Work-Related Accidents Caused By A Third-Party
- Work Site Accidents
- Other Types of Personal Injury Lawsuits
- Defective Products
- Zyprexa Settlement Advance
- Vioxx Settlement Advance
- Ortho Evra Settlement Advance
- Accutane Settlement Advance
- Avandia Settlement Advance
- Baycol Settlement Advance
- Celebrex/Bextra Settlement Advance
- Durgesic Patch Settlement Advance
- Fen Phen Setttlement Advance
- Fosamax Settlement Advance
- Gadolonium Settlement Advance
- HRT (Hormone Replacement Therapy) Settlement Advance
- Kugel Mesh Settlement Advance
- Mirapex Settlement Advance
- Paxil Settlement Advance
- Prempro Settlement Advance
- Reglan Settlement Advance
- Employment Discrimination (e.g. sex discrimination, racial discrimination)
- Wrongful Termination
- Whistle blower
- Sexual Harassment
- Sexual Abuse
- Wrongful Death (Accidental Death)
- Police Misconduct
- Wrongful Arrest/Imprisonment
- Nursing Home Abuse
- Commercial Cases (e.g. breach of contract, defamation or “false light”, fraud, copyright violations and other intellectual property rights disputes, patent infringement)
- Trust Fund Fraud
The following cases do NOT qualify for lawsuit funding.
- Social Security Disability cases
- Cases where the attorney is being paid by hourly retainer, or you are acting as your own attorney
- Cases where you were liable for causing the accident or incident
- Cases where the settlement will be paid by a person rather than an insurance company
- Small claims cases
- Criminal cases
- DUI or DWI cases
- Custody cases
- Immigration cases
- Cases where the plaintiff is a minor (under 18 years of age)
- Do I need to have an attorney?
Yes. You must have an attorney. We cannot get lawsuit funding for you unless you have an attorney. Also the attorney must be working for you on a “contingency fee” basis. Lawsuit funding cannot be done on cases where the attorney is working for you on an “hourly fee retainer” basis. You cannot be acting as your own attorney.
- Does my attorney need to approve my request for lawsuit funding?
Yes. We strongly suggest you discuss your need for lawsuit funding with your attorney before you request a lawsuit cash advance from our company. Some attorneys will not support their client’s request for lawsuit funding. Other attorneys support the request when they believe it serves the needs of their client. Your attorney’s support is essential. They will be asked to provide information and documents about your case. If you are approved for lawsuit funding, then both you and your attorney must approve the lawsuit funding agreement.
- Does the underwriter get involved in legally representing me?
No. Your attorney is your legal representation. The underwriter is only involved to provide you with the lawsuit funding.
- Are you giving me a settlement for my lawsuit?
No. The money you receive as an “advance” is not a settlement for your lawsuit. You and your attorney must still reach a settlement with the defendant and their insurance company.
- How do I get the lawsuit cash advance after my attorney and I approve the funding agreement?
All of our underwriters will overnight a check to you. Some of our underwriters will do a wire transfer or direct deposit into a bank account of yours.
- When should I get lawsuit funding via your company?
You should only try to get lawsuit funding from our company when you need money to pay your bills, and you have used all your other resources such as personal savings, borrowing from family and friends, and banks. When you get lawsuit funding from your lawsuit it should be the minimum amount to meet your needs at the time in order to minimize the fees you will pay when your case settles. If you have not reached the maximum amount the underwriter will advance for your case, it may be possible to get additional lawsuit funding at a later date.
- Why should I go through the additional expense of getting lawsuit funding?
You should not get lawsuit funding unless it will buy your attorney the time needed to get the settlement you really deserve, or you simply have no other way to pay your bills. The insurance companies that usually pay out the settlements will wait as long as possible to settle with you. If the cash advance on your lawsuit will allow you to hold out until your attorney can get you the settlement you really deserve, then it may be worth the expense to get the lawsuit funding. It may also be worth the expense to you if it will help you through a difficult financial situation. Such situations include avoiding foreclosure on your home, avoiding eviction from your apartment, avoiding repossession of your vehicle, avoiding shutoff of your utilities, or just keeping food on your table. You should discuss what is the best strategy for you with your attorney.
- Why should I use Chestnut Hill Funding to get my lawsuit funding?
Here are some reasons to work with us. We work with multiple underwriting companies so you and your attorney do not have to. Most attorneys do not like sending the same documentation to several companies. When you work with us we can put your case in front of multiple underwriters without the need for your attorney to send the same documentation to multiple companies. This saves your attorney time and money. When your request is turned down by one of our underwriters, we request your permission to send it to another without the need to get your attorney’s office involved in providing documents again. We try to get the lowest cost advance we can for you from our list of underwriters. We always try to treat you in a courteous and sympathetic manner. We know you are going through a difficult situation, and should not be treated in a rude or insensitive manner by people who you are contacting for help. We have helped hundreds of people from all over the country get lawsuit funding on their cases. We would welcome the opportunity to do the same for you.
If you have additional questions, or if you would like to learn if your lawsuit qualifies for lawsuit funding, please click here to contact us, or