What Happens If You Lose Your Case After Getting Funding?
Worried about repayment risks? Learn how non-recourse funding protects you if your lawsuit doesn't go the way you planned.
It’s the number one question on every plaintiff’s mind: “What if I take the money, but I lose my case?”
Losing a lawsuit is stressful enough without the added burden of a loan hanging over your head. If you’ve already received funding to cover your rent or bills during the legal process, the idea of paying it back after a loss can be terrifying.
Here is the good news: If you obtained a non-recourse advance (like the ones we provide), you are generally not responsible for repaying a single dime if you lose.
First, What Exactly is Pre-Settlement Funding?
Before we dive into the "what-ifs," let's clarify what this funding actually is. Pre-settlement funding isn't a traditional loan from a bank. It is a cash advance provided to plaintiffs to help cover living expenses and legal fees while they wait for their case to settle.
Unlike a credit card or a mortgage, this funding is tied strictly to the outcome of your case—not your credit score or your bank account.
The "Non-Recourse" Safety Net
This is the most important term you need to know: Non-Recourse.
A non-recourse advance means that the funding company assumes all the risk. We are investing in the potential of your case, not lending money to you personally.
- If you win: We are repaid directly from the settlement proceeds.
- If you lose: You owe nothing. You keep the money you received, and the funding company takes the loss.
At Flash Legal Funding, all of our advances are non-recourse. If you receive a cash advance of $5,000 or $10,000 and the judge rules against you, that money is yours to keep. We absorb the loss so you don't have to.
Final Thoughts
Legal battles are unpredictable. While your attorney fights hard to win, there are never any guarantees in court. That is why non-recourse funding is designed to protect you.
It provides peace of mind, knowing that even in the worst-case scenario—losing your lawsuit—you won’t be left with a mountain of debt. You can focus on your recovery and your case, without the financial stress weighing you down.