6 Ways of Legal Funding that you might not have heard about

Most lawsuits take a long time and are hard to understand, and sexual abuse lawsuits are no different. Because these lawsuits are about people, the arguments and feelings they bring up can seem overwhelming. In addition to the wrong that was done to them, victims of sexual abuse may have trouble paying their bills while their cases are going through the courts.

If you have a civil suit for sex abuse that hasn’t been settled yet, pre-settlement funding may be the way to get the money you need.

 After you’ve been hurt physically and emotionally and are waiting for the outcome of a lawsuit, a legal funding company can help you get the money you need. Too often, people for sexual abuse or attacked sexually.

Legal funding is a relatively new way for plaintiffs in lawsuits and the lawyers who represent them on a contingency fee basis to get the money they need. Legal funding goes by many different names, such as third-party financing, litigation funding, lawsuit settlement funding, pre-settlement financing, post-settlement funding, lawsuit loans, and litigation finance. The list keeps growing.

Legal funding definition

Legal Funding was made to help lawyers and plaintiffs with their cash flow. Even though the industry has grown a lot in the last few decades, it’s still fairly new, so most people don’t know much about how legal funding works or who will benefit from it.

Legal Funding Companies: Legal Funding Companies give money to lawyers and plaintiffs based on how much they expect to get from a settlement in the future. Legal funding is for people who have been hurt physically or emotionally and don’t have enough money to pay their bills or for lawyers who don’t have enough money to move their business forward. Legal funding helps lawyers get new clients, pay for operations, grow, and do other things.

Functioning of Legal Funding

When a plaintiff’s case has been settled or a judgement has been made, they can sell a portion of the money they are owed to a legal funding company like Balanced Bridge Funding for a discount instead of waiting to get paid all of it.

Legal funding for lawyers works the same way. Once a case has been settled or a judgement has been made, it may take a while for the contingency fees to be paid. They can get some of the money they are owed right away by selling a portion of it at a discount to a legal funding company like Balanced Bridge Funding.

Legal funding is not a loan

Legal funding is not like a loan in that there are no monthly payments, points, or up-front fees. Yes, there are costs associated with the advance (usually to cover the costs of underwriting), but you won’t have to pay them up front. Usually, all costs are paid when the advance is due to be paid back.

Also, as we’ve already talked about, legal funding is a process that can’t be taken back. So plaintiffs and lawyers won’t have to pay back their advances if a case doesn’t end well or if the debtor can’t pay the full amount of the award or fee.

Legal funding for sexual abuse cases

Settlement funding is a way to get money before you get paid for your lawsuit. You can get a cash advance that is equal to a percentage of the total amount you expect to get from your lawsuit. Because cases of sexual abuse often take a long time to settle, it can be hard for victims to keep their finances in order while they wait.

With a settlement funding agreement, you can use money that is already yours instead of waiting months or even years for your first settlement check. A legal funding company can estimate how much you will get paid in the end and give you a portion of that as a cash advance that goes into your bank account as soon as the next business day.

Attorney friendly funding

In order to get a loan or line of credit from a bank, you have to put up non-liquid assets as collateral. But legal funding companies will take case inventories as collateral. Legal funding companies know how much settlements and verdicts could be worth, so they can use case inventories as proof that solo practitioners or larger law firms will be able to pay back advances.

When you apply to a litigation finance company, they do not check your credit. Funding advances are business costs, not personal costs, so there’s no need to check personal credit. Also, most arrangements for legal funding don’t make attorneys directly responsible for paying back the money. Instead, payments are taken directly from attorney escrow accounts, administrative accounts, or obligor accounts.

Legal funding options

Both plaintiffs and attorneys have access to two types of funding: pre-settlement funding and post-settlement funding. As their names suggest, one is only available before a settlement amount has been decided, while the other is only available after a settlement amount has been decided.

The only people who can get the other two types of funding, voucher funding and attorney line of credit, are lawyers. Attorney Lines of Credit work differently than the other types of funding we’ll talk about below; it’s more like a traditional bank loan.

Pre-settlement lawsuit funding is the best way for plaintiffs to get money if they need it right away and can’t wait until a settlement is made. For pre-settlement funding, plaintiffs must already have a lawyer and a legal claim in place. Most applications for pre-settlement legal funding from plaintiffs can be approved in 48 hours.

Post-settlement lawsuit funding is the best choice for plaintiffs who need money to pay for day-to-day costs and costs related to their lawsuits but don’t want to pay the extra fee that comes with pre-settlement funding.

Like funding for lawyers after a settlement, funding for clients after a settlement is non-recourse. This means that if the debtor couldn’t pay the agreed-upon settlement amount, the plaintiff would still get to keep any part of the settlement that was advanced through a legal funding agreement.


Legal funding is a way for plaintiffs and lawyers to get the money they need when they can’t get it through traditional means. Legal funding companies give advances to their clients, which are based on how strong their cases are. With the money from legal funding, lawyers can put together strong cases or grow their practices, and people who have been wronged can start over.

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