Settlement cash advance is a common term used in lawsuit cash advance industry to refer to the amount which the lawsuit cash advance companies pay to a plaintiff who has filed a strong compensation case in a court but does not have sufficient money to pursue the case, as it may take many months for the verdict to come. The settlement cash advance is sanctioned on the basis of the merit of the case and the assumed settlement or verdict amount. The rates the lawsuit cash advance companies charge are quite high due to the fact that they only recover their settlement cash advance if the case gets a positive verdict. The plaintiff has the choice of paying a flat fee or a recurring fee.
Settlement cash advance is a non-recourse loan and even if the settlement or verdict amount is less than anticipated, the amount to be repaid never exceeds the amount of the injured person's share of the verdict. Not every state allows settlement cash advance. The Ohio court prohibited settlement cash advance saying that the funding could create a disincentive to settle a case, where the plaintiff would have to pay the entire amount of the settlement to the finance company.
Settlement cash advance amounts available and fees vary significantly, depending upon the nature of the case and company involved.
Many companies offer cash advance amounts between $500 and $25,000. A few offer amounts up to $100,000. Some companies will charge a flat fee and others a recurring fee for each month between the funding time and repaying time, sometimes as high as 15% per month. Settlement cash advance should be considered as a last resort, due to the high cost of this type of funding. When seeking Settlement cash advance, it is sensible to check with several companies, to obtain the lowest possible fees.