What Is An Advance Cash Settlement And When Is It Used


When someone suffers injury an as a result of the actions of another individual, they often file against that person for a settlement. If the court finds in favor of the injured party, the defendant is liable to pay a settlement to that injured party. This cash payment will either be a single payment, or in installments over a period of time.

Payment by installment is preferred by many people. It is easier to manage the tax on smaller amounts, and, on occasion, a structured settlement by installments may not be subject to tax.

It may be that while the trial is taking place, the plaintiff finds themselves in financial hardship. If they are injured they may be finding it hard to find a job. In this case some choose to take advantage of an advance cash settlement, taken out against whatever may be awarded in the outcome of the lawsuit. This is a low risk option for the plaintiff as, if they lose their case, they are not obligated to repay the money loaned. However, the interest rates on these settlement loans tends to be high, so taking out a loan needs careful consideration.

If a plaintiff decides that they do want to go ahead with a loan, they should inform their lawyer immediately about their plans. This is so their lawyer is not surprised when the lender contacts the lawyer to find out how the case is going. Plaintiffs need to be aware that lenders only want to make loans to plaintiffs who have a good chance of being successful in court.

Advance Cash Settlement Pending a Lawsuit


There are instances when a person is injured by the actions or negligence of another person, either emotionally or physically; and the injured party files for a settlement lawsuit against the latter. In case the court decides in favor of the plaintiff, who is the injured party, the defendant will have to pay him cash for settlement. This may come in the form of either lump sum money or structured settlement.

A structured settlement is a form of payment deferment which is given to the plaintiff in installments. This is more preferred by many people because of its various advantages. Because the structured settlement is in the form of smaller amount of cash paid on a certain schedule, taxes are not that significant. As a matter of fact, there are chances that the structured settlement may not be taxed at all.

However, during the trial period, there are times that the plaintiff may fall onto hard financial situations. Because most of them are physically injured, they may not be able to land a permanent job due to medical reasons. Thus, some opt to avail of advance cash settlement loan pending the lawsuit. This type of loan is being offered to the injured parties or plaintiffs of a settlement lawsuit, pending the litigation. This loan will be paid once the court grants the cash settlement to the plaintiff. What’s best about settlement loans is that once the borrower loses his case in the court, they do not have to repay for the loan. The drawback, however, is that settlement loans usually have very high interest rates, thus it is really advisable for the plaintiffs to think it through before finally deciding to avail a loan.

Once the plaintiff has finally decided on this, it is important that he informs his lawyer about the plan to apply for a settlement loan, as the lender will eventually contact his lawyer to get some information regarding the status of the case. Of course, the lenders will only grant the loan to those who have bigger chances of winning the case in the court. Moreover, it is also important to find a lender which gives the best interest rates and lowest fees.