Reasons why you might be denied lawsuit funding?

This post is in response to questions from people who have been refused lawsuit funding and don’t fully understand why.

It’s important to understand that lawsuit financing is not the same as a traditional financial loan. The qualifying criteria are different.

The merits of your case and the probability of your lawsuit winning or being settled, are the critical qualifying factors to receive any lawsuit funding. Unless you have a strong case, to begin with, it is unlikely that you will receive approval for financing and vice versa.

In some instances, even a strong case will not guarantee you funding; There could be various reasons for your application to be denied. Remember that each application is examined on a case-by-case basis and can have a variety of deciding factors in play.

#1 Your claim was disqualified because of where you live

Due to currently unresolved legal technicalities, individual states make providing lawsuit funding impossible. In Maryland, Tennessee, and Colorado, lawsuit funding is not allowed. And in particular, cases, depending on the type of claim, other states don’t enable lawsuit funding.

#2 You don’t have a pending lawsuit

Regardless of all of the strengths and merits of your lawsuit, you need to have an attorney before you can even qualify for a lawsuit loan. Unless you have legal representation, your chance of winning or also settling a case is virtually nil. Lawsuit funding companies are entirely dependent on you receiving a settlement or obtaining a judgment. As a consequence, you need to have a pending case just to be


Whether or not you receive lawsuit funding, if you believe you have a strong case, you should always consult a contingency fee-based attorney. Retaining the skills and expertise of a suitably qualified attorney helps you secure the maximum amount of compensation possible despite the fact you may have to pay up to 40% and legal fees.

#3 You have already received too much funding

Some companies will even consolidate your existing loans by paying off the previous company loan. If you do this, you could get a much lower interest rate and enjoy significant savings.

Most lawsuit funding companies are happy to talk to clients who have previously received funding, but there will be a point where it will not be feasible to advance you any more cash.

There is no legal cap on the amount of funding you can receive, but it will always be related to your case’s overall value.

For example, your case is worth $2,000,000, and you owe $100,000 to a different funding company you should easily qualify for additional funding. If your case was worth $20,000 and you have a fully leveraged balance of $20,000 with another company, this will disqualify you.

Even if you have been denied lawsuit funding in the past, this does not preclude you from qualification in the future. Some plaintiffs do qualify at a later date. In several cases, this is down to the fact that their lawsuits are now more mature, and the possibility of a settlement is much higher. If you have been denied funding in the past, we would recommend you contact a reputable pre-settlement funding company today to see if your status has changed.

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