Pre-settlement funding can be a crucial financial lifeline for plaintiffs in the midst of a lawsuit. Once your application is approved and funds are disbursed, it’s important to understand what comes next—both in terms of responsibilities and best practices. Properly managing your funds can make a meaningful difference in your financial stability and long-term outcome.

In this article, we’ll walk you through what to expect after receiving your pre-settlement funding and share tips on how to manage it wisely.

1. Receiving Your Funds

After approval, the funds are typically transferred to your bank account or sent via check within 24 to 48 hours. This cash advance is yours to use as needed—without restrictions from the funding company.

Common Uses Include:

• Medical bills

• Rent or mortgage payments

• Utilities and groceries

• Childcare and transportation

Tip: Treat the funds as a temporary bridge, not a long-term financial solution.

2. Keeping Track of Your Expenses

Now that you have the funds, it’s essential to manage them carefully. Start by creating a basic budget to track where your money goes.

How to Do It:

• List all current and upcoming essential expenses

• Prioritize needs over wants

• Allocate funds accordingly

Why It Matters: The more efficiently you use your funding, the less likely you’ll need to request additional advances—which can increase your repayment amount.

3. Communicating with Your Attorney

Your attorney will stay in contact with the funding company, particularly when your case settles. Keep them informed if you:

• Consider taking an additional advance

• Have questions about your funding agreement

• Experience changes in your financial situation

Tip: Never agree to more funding without discussing it with your attorney first.

4. No Monthly Payments or Interest Accrual from You

Unlike traditional loans, pre-settlement funding does not require monthly payments. You don’t make payments while your case is ongoing. Repayment is handled directly from your settlement once your case concludes.

Important:

• You only repay if you win or settle your case

• The repayment amount includes your advance, fees, and interest (if applicable)

• Your attorney will handle repayment directly from the settlement funds

5. Planning for Your Settlement

Once your case settles, the funding advance will be deducted from your final settlement amount. Planning ahead can help avoid surprises.

What to Expect:

• Your attorney receives the settlement

• Legal fees and liens are deducted

• The funding company is repaid their agreed amount

• You receive the remaining balance

Tip: Request a final breakdown from your attorney so you understand the full distribution of your settlement.

6. Avoiding Additional Advances Unless Absolutely Necessary

While many funding companies allow you to request additional advances, keep in mind that each one increases your total repayment. Use funding only when it’s essential to avoid diminishing your final settlement amount.

Ask Yourself:

• Do I truly need more funds now?

• Can I cut back on non-essential expenses?

• Have I explored other sources of temporary support?

7. Staying Informed and Empowered

Understanding your funding agreement is crucial. Know your rights, responsibilities, and the terms of your advance.

Things to Clarify:

• Is the interest rate simple or compound?

• Are fees capped?

• Is the funding non-recourse (you don’t pay if you lose)?

If anything is unclear, ask your attorney or the funding company for clarification.

Final Thoughts

Pre-settlement funding can be a valuable financial tool during your legal journey—but only if managed wisely. Once you receive your funds, make a plan, prioritize essential needs, and avoid unnecessary spending. Stay in close contact with your attorney and make sure you understand how the funding fits into your overall settlement plan.

Need More Guidance After Receiving Funding?
We’re here to help. Contact us with any questions or to speak with a pre-settlement funding specialist who can walk you through next steps and best practices for financial peace of mind.