Legal Funding Terms Every Plaintiff Needs to Know
Use this information to get the facts on how legal funding works. We’ve put together a list of the words and phrases you’ll run into most often so you know what to expect. Having these answers in one place makes it easier to keep track of your case and the funding process from start to finish.
Legal Parties & Case Status
Understanding the legal system starts with knowing who the players are and where your case stands. This section defines the people involved in a lawsuit and the stages you’ll encounter as your case moves through the court system.
Plaintiff: The individual who initiates a lawsuit; in the context of legal funding, the person seeking the cash advance against their case.
Defendant: The individual or entity being sued, typically represented by an insurance carrier or corporation.
Contingency Fee: A payment structure where an attorney’s fees are only paid out of the final settlement; no win, no fee.
Litigation: The legal process of resolving a dispute through the court system.
Lawsuit: The formal legal action where the plaintiff files a complaint to seek payment for injuries or damages.
Settlement: A voluntary, yet legally binding, agreement to resolve a lawsuit before a jury verdict or final court judgment is rendered.
Statute of Limitations: The strict legal deadline by which a plaintiff must file their lawsuit to maintain their right to seek damages.
Discovery: The “evidence gathering” phase where both sides share documents and witness info; a critical stage for funding approval.
Deposition: A session where a witness gives sworn testimony under oath; it often proves how strong a case really is.
Attorney of Record: The specific lawyer or firm officially handling the case and communicating with the court.
Judgment: A final decision made by a judge or jury that officially ends the trial and sets the award amount.
Funding Structure & Terms
Legal funding isn’t a traditional loan; it’s an advance on your future settlement. These terms explain the different ways you can access your money early and the specific rules that protect your personal finances if your case doesn’t win.
Non-Recourse Funding: A risk-free agreement where the advance is only repaid if the case is won; if the plaintiff loses, nothing is owed back.
Non-Recourse Funding vs. Recourse
• Repayment: Only if you win vs. Required even if you lose
• Risk: No personal risk vs. You are personally responsible
• Credit Check: No credit check vs. Impacts your credit
• Collateral: Just your case vs. Your house or bank account
Pre-Settlement Funding: A lawsuit advance provided to a plaintiff to cover living expenses while their legal case is active.
Settlement Advance: Also referred to as settlement funding; a cash payout provided before the final case proceeds are distributed.
Post-Settlement Funding: Funding provided after a case has settled, but before the insurance company has disbursed the final check.
Underwriter: The risk-assessment expert who evaluates the legal strength and potential value of a case to determine funding eligibility.
Recourse Funding: A traditional debt structure that must be repaid regardless of whether the lawsuit wins or loses.
Surgery Funding: When a funding provider pays for a necessary operation upfront so a plaintiff can get medical care before their case settles.
Buyout: When a new funding company pays off an existing lien from a previous provider, typically to secure a better rate or provide the plaintiff with more cash.
Third-Party Funding: Financial support provided by a specialized legal finance company, such as Thrivest Link, that is not the law firm or the court.
Partial Payout: Getting a portion of your money early while the rest of the settlement is being finalized.
Financial & Risk Definitions
When a case settles, there is a specific process for how the money is divided and paid out. These definitions cover the financial protections, rate types, and medical payment arrangements that ensure everyone is paid fairly from the final proceeds.
Lien: A legal claim placed on a settlement that ensures the funding provider is repaid directly from the final proceeds.
Funding Rate: The cost associated with receiving a legal advance, determining the final amount repaid from the settlement proceeds once the case resolves.
Simple Rate Structure: A non-compounding fee model where rates are applied only to the original amount advanced, avoiding the “snowball” effect.
Disbursement: The stage where funds are released, either to the plaintiff as an advance or to the attorney once the settlement is finalized.
Medical Lien: A claim from a doctor or hospital to get paid for your treatment once the case settles.
Letter of Protection (LOP): A promise from an attorney to a doctor that their bills will be paid out of the final settlement.
Diagnostic Funding: Cash used to pay for tests like MRIs or CT scans that document the injuries for the case.
Medical-Lien Financing: A specialized funding option that allows plaintiffs to receive necessary medical care with no out-of-pocket costs while their case is in court.
Structured Settlement: Getting your settlement money in a series of smaller payments over time instead of one big check.
Pro-Rata Distribution: A fair method of dividing a settlement if the total recovery isn’t enough to pay every lien and bill in full.
Dismissed with Prejudice: When a judge closes a case for good; if this happens, non-recourse funding means you owe $0.
How Do Lawsuit Advances Work?
Securing lawsuit advances has never been easier than with Thrivest Link Legal Funding. Get the cash you need in 24 to 48 hours.
1
Apply Online
Complete and submit our online plaintiff application form.
2
Case Review
We’ll review the details of your case to see if you qualify.
3
Get Funded
Once approved, you’ll receive your funding in 24 – 48 hrs.
What Our Lawsuit Funding Clients Say
Thrivest Link Legal Funding is an industry leading pre-settlement funding firm offering fast cash advances and lawsuit loans nationwide.
