Guide
For many plaintiffs, pre-settlement funding is a financial lifeline during long legal battles. Yet misconceptions about how it works often cause confusion—or even prevent people from applying when they desperately need support.
This article clears up the most common myths about pre-settlement funding, explains the truth behind them, and shows how Instabridge provides safe, transparent funding for plaintiffs nationwide.
Myth #1: Pre-Settlement Funding Is the Same as a Loan
Truth: It’s not a loan—it’s a non-recourse cash advance.
With a loan, you’re personally responsible for repayment, no matter what.
With pre-settlement funding, you repay only if you win or settle your case.
If your case is lost, you owe nothing.
Myth #2: You Need Good Credit to Qualify
Truth: Your credit score doesn’t matter.
Funding approval is based entirely on the strength of your case, not your credit history, job status, or income level. Plaintiffs with no credit—or poor credit—can still qualify.
Myth #3: The Funding Will Affect Your Case Value
Truth: Pre-settlement funding does not change your case’s settlement amount.
Your attorney continues negotiating the same damages regardless of whether you receive funding. The advance is simply repaid from your share of the settlement once the case resolves.
Myth #4: You’ll Owe Taxes on the Advance
Truth: In most cases, the advance is not taxable.
Since pre-settlement funding is not income or wages—it’s an advance on your lawsuit proceeds—the IRS generally doesn’t treat it as taxable. (Always consult your tax advisor for your specific situation.)
Myth #5: Funding Pressures You Into Settling Early
Truth: Pre-settlement funding does the opposite.
By providing financial stability, funding allows you to reject lowball offers and wait for the full settlement you deserve. Insurance companies lose their leverage when plaintiffs aren’t desperate for cash.
How Instabridge Debunks These Myths in Practice
At Instabridge, we build trust by providing:
Non-recourse advances—no repayment if you lose
Transparent terms—no hidden fees or compounding interest
Fast approvals—funds available in as little as 24–48 hours
Plaintiff-first service—protecting your financial and legal interests
We work directly with your attorney to ensure funding supports your case strategy, never interferes with it.
Conclusion: Facts, Not Myths
Pre-settlement funding is a safe, effective tool for plaintiffs who need financial support during litigation. By separating fact from fiction, you can make confident, informed decisions about whether funding is right for you.
If you’re struggling financially while waiting for your case to resolve, don’t let myths hold you back. Contact Instabridge today to learn the truth about pre-settlement funding and secure the support you need.
