Cash advances against payments that you know are coming are a great way to relieve your stress. By borrowing money against future income, you can prevent yourself from going into debt. Cash advances aren’t without fees and costs, but provide fast access to money when you need it most.

If you have a lawsuit currently pending and expect to receive a cash settlement at the end, you may want to consider getting a cash advance on a pending lawsuit. Known as pre-settlement funding, this type of cash advance is low risk. The funds can help you pay for lawyer fees, medical bills, and other expenses that you may have.

Advantages of a Cash Advance on a Pending Lawsuit

The largest advantage of pre-settlement funding is that it can provide you with funds straight away. This is a serious thing to consider for personal injury lawsuits, which bring immediate costs while the lawsuit plays itself out.

Further, having access to funds before you enter settlement negotiations also means that you have more leverage. You won’t settle quickly because you are in need of cash, and can hold out for a larger payout.

Another key benefit is that most pre-settlement advances do not come with risk. Most companies will have a clause in their contracts and legal documentation that states that you will owe no money if you lose your case.

Applying for pre-settlement funding also does not need a credit check. This means that they will not affect your credit score, and are still accessible even if your personal finance has been poor in the past.

Disadvantages of Pre-Settlement Funding

Pre-settlement funding is not a type of lending that banks and other financial institutions engage in. Instead, you’ll have to go to a company that focuses on settlement advances, and there are fewer of them. This can make it harder to find one, especially if you do not live in an urban area.

You may also not be eligible for a pre-settlement advance if the lending company determines you do not have a good chance of winning your case. This is why they will consult with your lawyer as a part of the application process.

The US Chamber of Commerce’s Institute for Legal Reform also opposes pre-settlement funding. While there is little risk for those who apply for an advance, the industry is unregulated. This means that interest rates charged can be high – often more than rates charged by credit cards.

However, this does not mean that you shouldn’t consider getting a cash advance on a pending lawsuit. Instead, you should be careful and read over every contract carefully to know exactly what sort of fees, interest, and charges you are agreeing to before you sign.

Further, they allege that pre-settlement funding can increase how long it takes for a case to be settled, which can increase lawyer fees and other court costs.

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