Understanding Pre Settlement Funding
As a client looking for a lawsuit advance on your pending lawsuit, the most important aspect is getting the approval from underwriting.
The aim of these tips is to give you, the plaintiff some advice in getting your personal injury case approved and navigating the world of pre settlement funding.
The first step in getting your personal injury case approved for funding is getting the underwriters the requested paperwork on your case.
Cases where the client is proactive in assisting the gathering of this requested paperwork, have a much higher probability of approval.
Remember, you are the client, this is your case. You have every right to request documents on your case from your attorney. Having said that, here is the list of documents that underwriters would ideally like to review on personal injury cases:
- Police Report, Accident Report, or Incident Report
- Medical Records Relating to the Accident and Subsequent Treatment
- Insurance Coverage on the Defendant
- Copy of the Lawsuit (Complaint) if in Suit (i.e. if filed)
- Pay-off Information (if prior advances)
- Expert Reports, Analysis, Opinions, or investigative Reports
- Witness Statements
- Settlement Offers and Settlement Demands
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Pre Settlement Funding and Your Auto Accident Police Report
The police report is important because it provides an independent party that documents an accident took place. They often include a lot of information, such as the parties involved, if anyone was issued a ticket or arrested, or if anyone was under the influence of drugs or alcohol.
Police reports will often indicate if the involved parties were taken to an ER and if an ambulance was used
Police reports often indicate which insurance companies are involved in the accident. And sometimes even state who was at fault, which can be important in determining the liability on a case. To obtain pre settlement funding on a motor vehicle accident, have a police report is essential.
Prior Advances and Your Pre Settlement Loan
Prior advances on the case are only applicable if you have received a prior advance on the case. If this is the situation, the pre settlement funding company requests the payoff information from the prior pre settlement funding company. The standard practice is to pay off the existing advance, and issue “new” money to the client. Pre settlement funding companies only allow one existing lien against your lawsuit at any given time.
We’ll have to buy-out any existing advance. This allows America Pride Legal Funding (as the current lawsuit funder) to have a priority lien on the case. For example, let’s say you have a $2,000 prior advance on your case. And you want an additional cash advance of $2,000. Let’s assume the payoff for the previous advance is $3,000. So, the pay-off plus the new advance would be $5,000. So, when a client has an existing lien, it is always more challenging to do an additional advance, but it is certainly possible depending on the injuries, insurance coverage, and liability of your case.
Medical Records and Your Pre Settlement Loan
Secondly, medical records are critical because they go a long way in determining the severity of your injuries. The seriousness of your lawsuit is directly proportional to the value of your lawsuit. The more server your injuries, the more likely your case will settle for a larger dollar amount. And the more severe the injuries, the more likely we can approve you for a larger dollar amount.
Personal injury cases where the victim had to have surgery are almost always worth more than cases where the victim did not have surgery. It’s harder for the defendant’s attorney to attack an injury claim that required surgery. But it’s much easier to attack injuries that didn’t require surgery and to claim the plaintiff is simply faking the injury.
All pre settlement funding providers distinguish between injuries requiring surgery and injuries that do not. Injuries that not require surgery are referred to as “soft-tissue” injuries.
Therefore, in terms of medical records, we want to review the following:
- Ambulance/ER report if applicable.
- Initial ER records or initial treatment records
- Operative Surgery Reports
- MRI, X-Ray, and any imaging reports
- Insurance Coverage of the Defendant
To get approved for a pre settlement loan, the chiropractic records are not needed.
Pre Settlement Funding Notes
Knowing the insurance policy coverage limits from the defendant is extremely important for pre settlement funding. The defendant is the party you are suing.
The defendant is usually the one responsible for causing the accident. The limits on their insurance policy place a theoretical dollar limitation on the case. For example, if a defendant has a $100,000 policy limit, that may be the maximum value of the case. Often the legal funding company will only advance 10% of an insurance policy coverage limit. If the defendant has no insurance then as far as the legal funding company is concerned, the case has no value and will not be approved for funding.
To obtain a pre settlement loan, it’s essential that your lawyer provide a copy of the complaint. (The filed lawsuit in many states is called a “complaint”). When a lawsuit gets filed, this lets the pre settlement funding company know your attorney is serious.
The complaint is a legal pleading filed in civil court case that establishes the plaintiff’s case against the defendants.
The complaint is used to provide the court with notification and a basis for the case while providing notice to the defendants that a case has been filed against them.
The date a lawsuit is filed is important because it tells us how far along the case is, which gives us an idea how long it will be until settlement. So basically, the filed complaint gives an idea of how serious your attorney is, how experienced they are, and the maturity of the case. All this information helps the pre settlement funding company evaluate the case for funding.