Misinformation about pre-settlement funding keeps people from a legitimate financial tool. Here are the myths worth busting.
Myth one: 'It's a loan.' It's not — pre-settlement advances are non-recourse purchases of a portion of your future settlement.
Myth two: 'My attorney won't allow it.' Attorneys can't lend you money themselves; they can and often do refer clients to funding companies when appropriate.
Myth three: 'It will hurt my credit.' Funding is not reported to credit bureaus and does not affect your credit score.
Myth four: 'I'll owe the money even if I lose.' You won't. Non-recourse means no obligation if the case loses.
Myth five: 'The funding company will take over my case.' AARC has no role in case strategy, settlement decisions, or attorney-client matters.
Myth — it's just a loan with a different name
Loans require repayment regardless of outcome. Pre-settlement advances are non-recourse — no recovery, no repayment.
That single structural difference makes funding fundamentally safer than any loan product, even ones with lower nominal rates.
Myth — my attorney won't let me
Attorneys cannot lend you money themselves (rules of professional conduct prohibit it), but they can and routinely do refer clients to funding companies.
If your attorney is unfamiliar with funding, AARC will speak with them directly to answer questions and walk through the agreement.
Myth — it will wreck my credit
AARC does not pull credit during underwriting and does not report advances to credit bureaus afterward. Your score is unaffected.
There is also no impact on your future ability to qualify for mortgages, auto loans, or credit cards.
Myth — I owe it back even if I lose
Non-recourse means exactly the opposite. If your case loses, AARC absorbs the loss. You owe nothing, the debt is not reported, and there is no collection activity.
Read your agreement to confirm the non-recourse provision is in plain English with no carve-outs.
Myth — the funder will take over my case
AARC has no role in case strategy, settlement decisions, or attorney-client matters. We are not a party to the case and have no standing to influence it.
You and your attorney retain full control. Always.
Talk to AARC before you make a financial move you'll regret
Every situation is different, and the right answer depends on the specifics of your case, your timeline, and what you need the money for. The single best thing you can do is have a short, no-pressure conversation with someone who funds these cases every day.
Call AARC at (800) 297-3834 or apply online in about three minutes. There is no credit check, no obligation, and no cost to find out what you qualify for. If a cash advance isn't the right tool for your situation, we'll tell you that too.
