10 Common Questions About Post-Settlement Funding for Class Action Settlements
For individuals involved in a class action lawsuit, the wait for a settlement payout can sometimes be long and financially challenging. Post-settlement funding offers a solution, providing plaintiffs with access to funds while awaiting the official settlement distribution. Here, we’ll address some of the most frequently asked questions to help you understand if post-settlement funding is the right option for you.
1. What is Post-Settlement Funding?
Post-settlement funding is a financial option that provides plaintiffs with an advance on their anticipated settlement payout after a lawsuit has reached a favorable outcome. It’s not a loan; rather, it’s a non-recourse cash advance, which means that if you don’t receive the settlement funds, you aren’t required to repay the advance.
2. How Does Post-Settlement Funding Work?
After the settlement amount is confirmed but before funds are distributed, plaintiffs can apply for an advance with a post-settlement funding company. If approved, the company provides a portion of the settlement upfront, and when the settlement finally arrives, the advance plus any fees is repaid.
3. Who Qualifies for Post-Settlement Funding?
Eligibility depends on a few factors. Primarily, you must have an agreed-upon settlement awaiting disbursement. In most cases, only plaintiffs who have won or settled their case are eligible, as post-settlement funding companies need assurance that funds will be paid eventually.
4. How Much Funding Can I Receive?
The amount available for advance depends on the size of your settlement. Typically, funding companies provide a percentage of the total settlement value, often between 10% to 30%. The exact amount depends on factors like the settlement terms, case type, and any remaining attorney fees.
5. Is Post-Settlement Funding the Same as a Loan?
No, post-settlement funding is not a loan. Unlike traditional loans, this type of funding is non-recourse, meaning if you do not receive your settlement for any reason, you are not liable to repay the advance. The risk rests on the funding company rather than the plaintiff.
6. How Long Does the Post-Settlement Funding Process Take?
Once you apply and provide the necessary documentation, approval is generally swift. In many cases, plaintiffs receive funds within 24 to 48 hours after approval. The speed depends on factors like how quickly your attorney can provide relevant information to the funding company.
7. What Are the Costs Associated with Post-Settlement Funding?
Most funding companies charge fees based on the risk they assume, often expressed as a monthly or annual rate. It’s essential to review these terms carefully and ask about all fees to avoid unexpected costs. Rates and terms vary, so shopping around or consulting with your attorney can help secure the best option.
8. What Can I Use Post-Settlement Funding For?
There are no restrictions on how you use the funds. Common uses include covering medical bills, paying rent or mortgage payments, and covering daily living expenses. The primary goal is to provide financial relief while awaiting the settlement payout.
9. Does My Attorney Need to Be Involved?
Yes, most funding companies require collaboration with your attorney. Your attorney will need to share details of your settlement and confirm the expected payout. Additionally, attorneys often play a role in repaying the advance from the settlement proceeds once the payout is finalized.
10. What Happens If My Settlement Payment is Delayed or Less Than Expected?
Post-settlement funding agreements are generally designed to accommodate delays. If the settlement is delayed or reduced, discuss the situation with your funding provider. In most cases, they won’t pursue additional funds from you beyond the settlement amount, protecting you from financial liability if issues arise.
Is Post-Settlement Funding Right for You?
If you need immediate financial relief, post-settlement funding can be a valuable resource. However, given the associated costs, it’s wise to weigh this option carefully. Consulting with your attorney or a financial advisor can provide further guidance based on your specific circumstances.
Post-settlement funding offers a practical solution for those waiting on class action settlements but facing financial pressures. By addressing these common questions, we hope you’re better equipped to make an informed decision and secure the financial stability you need while awaiting your payout.
How Amicus Capital Group Can Help
Amicus Capital Group is a valuable partner for law firms facing post-settlement funding challenges. By offering flexible law firm loan solutions, quick approval processes, and financial stability during the waiting period for settlement payouts, Amicus Capital Group ensures that law firms can maintain operations, cover case-related costs, and keep clients satisfied. Their specialized knowledge of law firm financial needs makes them an ideal choice for firms seeking reliable funding solutions during the post-settlement phase. If you’re looking for law firm loan services in Santa Clarita, CA, make sure to contact us today.
