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Pre-settlement risk is the risk that comes with taking out a pre-settlement funding loan. Pre-settlement funding is not like other loans where you borrow money now and pay it back later. Pre-settlement allocation involves placing a lien on your pending lawsuit to receive cash today.
In exchange for giving up some ownership of your future lawsuit, you get cash today that can be used whichever way you want. There are risks associated with receiving pre-settlement funding if your case does not win at trial or settle beforehand. The most important thing to understand about this kind of financing is the concept of non-recourse debt. This implies that the lender cannot come after the borrower for more than what is agreed upon in the funding agreement.
Some of the risks involved in the pre-settlement funding include the following:
Celebrate Lula