Pre-settlement funding is when a company gives you money immediately in exchange for the right to receive a portion of your financial settlement in the future. You get money right away in order to pay bills, and you don’t need to pay anything back until the money from the settlement of your claims comes in. In the event that you never receive money from your claims, you don’t have to pay anything back to the legal funding company (the official term for this is “non-recourse”).
Pre-settlement funding is also referred to as consumer legal funding. This type of legal funding is not a loan; there is no debt, no monthly payments, and no risk of collections calls or wage garnishments. Any money that is paid to the legal funding company comes straight from the proceeds of the settlement, never out of your pocket.