Pre-settlement funding is money advanced to a plaintiff while their legal claim is still pending, repaid out of the proceeds if and when the claim resolves. It is a purchase of a portion of the potential proceeds, not a loan, and repayment is contingent on there being a recovery.
How the transaction is structured
In a consumer legal funding transaction, a funding company pays you an amount now in exchange for the right to receive a portion of whatever your claim eventually produces. California law defines this as a nonrecourse transaction in which the company purchases, and the consumer assigns, a contingent right to receive an amount of the potential proceeds of a settlement, judgment, award or verdict.
The word that carries the weight is contingent. Your obligation to pay exists only if proceeds exist. That single feature is what separates this from borrowing, and it is why the transaction is priced differently than a bank loan.
Who it's for
Pre-settlement funding is aimed at people who have a represented claim, a documented injury, and a gap between the money stopping and the case resolving. It is not a general-purpose financial product and it isn't useful to someone without a pending claim.
It also isn't free money. A funding agreement states what you will owe out of the proceeds, and you should read that figure carefully and discuss it with your attorney before signing anything.
What it is not
It is not a loan, not a line of credit, and not an advance from your attorney — California law bars an attorney retained by a consumer, or that attorney's immediate family, from having a financial interest in a consumer legal funding company or from providing consumer legal funding directly to the consumer.
It also isn't an opinion about your case. A funding decision reflects a company's willingness to take risk on a claim. It is not a prediction of what your case is worth, and no funder can tell you that.
Talk to Green Light
Green Light Legal Funding, LLC is a California consumer legal funding company based in Beverly Hills, serving eligible personal injury plaintiffs with claims pending in California.
Call 310-303-1858 or request funding. There's no cost to ask and no obligation.
More on Pre-settlement funding in California.