Have a Pending Lawsuit and Need Immediate Cash? Here’s What You Can Do


When you find yourself in a legal battle, financial strain can become overwhelming. For those with pending lawsuits, the need for immediate cash to cover medical bills, living expenses, and legal fees is a significant concern. This is where lawsuit loans, also known as litigation funding, come in. These loans offer a lifeline to plaintiffs (individuals bringing the charges), providing them with funds before the legal case concludes. In this guide, we explain lawsuit loans, uncover why people turn to them, and detail what happens when the outcome of a case is unfavorable. Read on for all you need to know about litigation funding. 

What is a Lawsuit Loan?

Lawsuit loans, otherwise known as litigation funding, are financial arrangements where funds are provided to plaintiffs before their legal case reaches a settlement. It is basically borrowed money in the middle of a legal case that can cover things like medical bills or living expenses. In this process, a lawsuit funding company enters into an agreement with the plaintiff. In exchange for immediate cash, the plaintiff agrees to pay back a portion of their eventual settlement. 

To secure the arrangement, the plaintiff’s attorney establishes it as a lien on the case file. When the case is ultimately settled or resolved successfully, the lawsuit settlement funding is then repaid.  However, if you lose your case, you might still have to pay back the loan, so it’s a bit of a risk.

If you have experienced a personal injury recently, such as a slip and fall or medical malpractice, you may be entitled to seek compensation and take out a lawsuit loan to cover the interim costs. Fair Rate Funding, a New Jersey lawsuit loan provider, cites automobile accidents as the most common type of lawsuit loan. Other common ones include premises and product liability cases.

Why People Get Litigation Funding

People seek out litigation funding if they require financial assistance during costly legal disputes. These loans cover expenses such as ongoing medical bills following the incident and increased living costs due to loss of income. Litigation funding is especially valuable when plaintiffs can’t work due to injuries or when they are facing powerful opponents. 

Funding can level the playing field, which means that plaintiffs can hire more experienced, expensive lawyers and build stronger cases. It also reduces any pressure to accept low settlements due to desperation, and it eases the heavy emotional burden of legal battles. 

What’s more, lawsuit loans ensure access to justice for people lacking in financial resources. That being said, you have to remember that litigation funding carries its own costs and risks. If you lose your case, you may be left in debt. It is essential for individuals to carefully assess their circumstances and consult with their attorneys before seeking a lawsuit loan.

Repaying Your Lawsuit Loan

If you win your case in court, repaying your loan is quite straightforward. You will have already agreed on the repayment terms and you can use the settlement money you have been awarded to pay back the loan to the provider. However, it can be more complicated if you lose your lawsuit.

In the instance that you lose your court case, the repayment terms will depend on your agreement with the loan provider. The good news is that most lawsuit loans are non-recourse, meaning you don’t need to repay them if you lose. However, some may require collateral, meaning the lender can claim assets from the plaintiff in case of loss. Collateral can be a property, vehicle, jeweler, or any other asset that has significant value.

It’s vital to understand the terms of your lawsuit loan, consult your attorney, and clarify repayment obligations before accepting the litigation funds to avoid surprises in the event of an unfavorable case outcome. Make sure you have a plan for if you lose the case so you don’t end up in debt or financial hardship.

In a nutshell, lawsuit loans serve as a crucial financial lifeline for individuals navigating costly legal disputes. These litigation funds can level the playing field, provide immediate relief for daily costs, and ensure access to justice for all. Yet, lawsuit loans are not without their potential pitfalls, especially if a case is lost in court. It is important to understand the terms of the loan, consult with legal counsel, and have a contingency plan in place when you are considering litigation funding. This will help you to manage if you need to pay the loan back without winning compensation. Make sure you are entering into a situation that you can safely get out of as well.


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