After an accident, you’ll need cash to pay for expenses related to the crash and to potentially cover a gap in lost income. Your settlement will cover these expenses, but it could take months or years for you to get that money. Instead of waiting, you could accept legal funding now and avoid the stress of waiting for a payout.
Unlike a traditional bank loan, legal funding for car accidents include a flat fee with no interest and a fast, simple approval process. Even better, if you lose your lawsuit and don’t win compensation, you don’t have to pay back any of the money you received.
That’s because the IRS classifies legal funding as a form of nonrecourse debt. Your settlement, not your personal assets, serves as collateral for the funding. Instead of being treated like a loan, the IRS sees legal funding as an investment, where the company making the funding offer assumes all risk.