Guide
Common Reasons Pre-Settlement Funding Applications Get Denied
Applying for pre-settlement funding can seem straightforward, but not everyone is approved. If your funding request was denied, it may have been due to one or more common issues — not necessarily because your case lacks merit. Understanding these reasons can help you address any problems and reapply successfully. Here are some key factors funders look at:
No attorney or incomplete documentation. Funding companies typically require that your case is handled by a licensed attorney. If you applied without a lawyer, or if your attorney failed to submit key documents (like medical records, accident reports, or a signed fee agreement), you may be denied. Insurers and funders alike need confidence that your case is being properly managed. If you get a denial for this reason, make sure to retain a qualified lawyer and gather all needed paperwork (police reports, medical bills, etc.) before reapplying.
Already maxed out available funding. There are limits on how much funding can be advanced per case. If you or your attorney have already secured previous advances, or if the insurer has already made a substantial offer, a funder might say you’ve hit the limit. In practice, this means if your attorney thinks only a small additional advance is justified, the provider may refuse. It could also happen if multiple funders have already advanced funds for the same case. If denied for this reason, you might wait until the case progresses further (when more is at stake) and then try again.
State law restrictions. Laws governing lawsuit funding vary by state. In a few states (such as Arkansas, Colorado, Maryland, and West Virginia), funding companies face strict regulations or prohibitions. One source explains that “regardless of the strength of your case, you will be denied funding if you live in one of these states”. Unfortunately, if your case is filed in (or will settle in) a restricted state, Instabridge cannot provide funding due to legal limits. For those in a legal jurisdiction where funding is allowed, this won’t be an issue.
Outstanding financial obligations (liens, bankruptcies). Funders will review your financial background to some extent. Even though credit score isn’t considered, active liens or past bankruptcies can be red flags. For instance, if you have child support liens, tax liens, or a recent bankruptcy, the funder may worry that those creditors would take priority over your settlement. In such cases, clearing up liens or satisfying obligations (if possible) can improve your chances. Once these issues are resolved, you can reapply.
Case is too new or missing evidence. If your accident or injury just happened and you don’t yet have full documentation, a funder may decide it’s too early. As one guide puts it, if “crucial documentation is missing – police reports and medical documents, for example – pre-settlement funding firms may be reluctant”. Similarly, if the incident is very recent, there may not be enough evidence to prove liability or damages. Be patient: once your attorney collects the key records and your case is a bit more developed, you can try again with a stronger application.
Disputed liability or weak case merits. The chief criterion for funding is the likelihood of a favorable outcome. If fault is unclear (for example, if you may have contributed to the accident), funders may be cautious. Any inconsistencies in the story or conflicting evidence can also cause denial. In short, they want to back cases where plaintiffs are likely to win. If your initial application was denied for liability concerns, discuss with your attorney how to strengthen the case (additional witness statements, expert opinions, etc.) before reapplying.
What to do if you’re denied: First, don’t panic. A denial is often based on fixable issues (no attorney, missing paperwork, etc.). Review the reasons given, then work with your lawyer to address them. After correcting deficiencies, you can reapply. If there was no specific reason listed, feel free to reach out to Instabridge to ask for feedback. Our team is happy to explain any issues and offer suggestions. Remember, being denied once doesn’t mean funding is impossible — it just means you need to build your case further.
Conclusion: Keep Fighting with Instabridge on Your Side
A denial of funding is a setback, but it can usually be overcome. Once you have all necessary documentation and counsel, funding becomes much more likely. Contact Instabridge if you have questions about the denial or the application process. We work closely with plaintiffs and attorneys to ensure applications are complete and compelling. If you’ve been denied, talk to us about how to strengthen your application or consider reapplying later. We’re here to help make sure your financial needs don’t derail your case. Contact Instabridge today for guidance on securing the funding you deserve.
