Do Medical Bills Have to be Paid Out of a Settlement Funding Loan?

When you’re involved in a personal injury case, mounting medical bills can quickly become a significant source of stress. These expenses add pressure to an already challenging situation. Settlement funding loans can provide much-needed financial relief during this difficult time.

If you’re considering applying for a settlement funding loan, you might wonder if you’re obligated to use that money to pay off your medical expenses. The good news is that the decision is entirely up to you! These loans offer flexibility, allowing you to allocate the funds where they are needed most.

You can use the settlement funding loan for various purposes beyond medical bills. This might include covering living expenses, paying legal fees, or managing other financial obligations. The primary goal is to alleviate financial stress so you can focus on your recovery and legal case.

Understanding Settlement Funding Loans and Medical Bills

Settlement funding loans can offer a lifeline, providing crucial financial support during this challenging time. We will explore how settlement funding loans work and how they can help manage your medical bills, ensuring you can focus on recovery and your legal battle without the added financial stress.

What is a Settlement Funding Loan?

A settlement funding loan, also known as pre-settlement funding, is a cash advance provided to plaintiffs in personal injury cases. This money is intended to help cover living expenses and bills while awaiting the resolution of their lawsuit. It’s important to note that settlement funding loans are not like traditional loans – they are non-recourse, meaning you only repay the loan if you win your case.

How Settlement Funding Loans Can Help with Medical Bills

While you’re not required to use your settlement funding loan to pay medical bills, it can certainly help alleviate the financial pressure. Medical expenses can quickly pile up, especially if you’ve suffered severe injuries that require ongoing treatment. By using a portion of your settlement funding to pay off these bills, you can focus on your recovery without the added stress of debt.

Several federal laws and assistance programs can also support your financial well-being, providing a comprehensive approach to handling medical expenses:

VA and Medical Billing: Veterans must complete the Request for VA Billing form and maintain ongoing communication about settlements, helping the VA manage costs and recover funds for healthcare services.

No Surprises Act: Effective from January 1, 2022, this federal law protects consumers from unexpected medical bills, particularly from out-of-network providers. Patients must be informed of and consent to any balance billing, reducing the likelihood of surprise medical debts affecting settlement funds.

Financial Assistance Programs: Government programs like Medicaid, Medicare, and the Children’s Health Insurance Program (CHIP) offer financial assistance for medical expenses, alleviating the pressure to use settlement funds for medical bills directly.

Debt Collection Protections: The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates debt collection practices to prevent abusive, unfair, or deceptive methods. The FDCPA governs collection agencies, debt buyers, and lawyers, requiring them to provide specific information about the debt when contacting consumers.

Paying Medical Bills with Settlement Funding Loans

After addressing your immediate financial needs with your settlement funding loan, it’s crucial to consider the next steps in managing your medical bills.

Prioritizing Bills and Expenses

Once you receive your settlement funding loan, it’s essential to prioritize your bills and expenses. Consider allocating money to:

  • Mortgage or rent payments
  • Car payments
  • Groceries and essential living expenses
  • Outstanding medical bills

Remember, the choice is yours – you have the freedom to use the funds as you see fit.

Negotiating Medical Bills

In our experience, many clients are unaware that medical bills can often be negotiated. Your lawyer may be able to work with healthcare providers to reduce your bills, sometimes by as much as 20% or more. It never hurts to ask!


  • Your lawyer successfully reduces a $10,000 hospital bill by 25%, saving you $2,500.
  • You arrange a payment plan with your physical therapist, spreading out the cost of treatment over several months.

Lien-Based Medical Care

Another option to consider is seeking medical care from providers who work on a lien basis. These doctors, physical therapists, and hospitals agree to treat you without requiring upfront payment instead of placing a lien on your future settlement or jury award.


  • You find an orthopedic surgeon who specializes in treating car accident victims on a lien basis.
  • A lien-based physical therapy clinic helps you recover from your injuries without adding to your immediate financial burdens.

Receiving Your Settlement or Jury Award

Receiving your settlement or jury award is a significant milestone in your legal case, marking the culmination of your efforts to seek justice and compensation for your injuries. This moment represents not only a financial recovery but also a validation of your rights and the impact of your experience. Understanding the process and what to expect can help you navigate this important phase with confidence and clarity.

The Distribution Process

When your case concludes and you receive a settlement or jury award, the funds will first go to your personal injury lawyer. They will then pay off any liens, including those from medical providers and your settlement funding company. Your lawyer will also deduct their fees before releasing the remaining funds to you.


  • Your case settles for $100,000. After paying medical liens, legal fees, and your settlement funding loan, you receive $60,000
  • A jury awards you $500,000. Following the distribution process, you end up with $350,000

Paying Outstanding Medical Bills

If you still have outstanding medical bills after receiving your settlement or jury award, it’s crucial to pay these off promptly to avoid potential damage to your credit. Work with your lawyer to ensure all liens and bills are satisfied.

Key Takeaways and Next Steps

After fully absorbing the key takeaways, the next step is to consider your options:

Applying for a Settlement Funding Loan

If you’re struggling to make ends meet while awaiting the resolution of your personal injury case, a settlement funding loan from Mayfair Legal Funding can provide much-needed relief. Our loan representatives are here to guide you through the application process and answer any questions you may have.


  • You apply for a $5,000 settlement funding loan from Mayfair Legal Funding to help cover rent and groceries while your case is pending.

Prioritizing Bills and Seeking Guidance from Your Lawyer

As you navigate the complexities of your personal injury case, remember to prioritize your bills and expenses, and don’t hesitate to seek guidance from your lawyer. They can help you make informed decisions about using your settlement funding loan and negotiating medical bills.

Get the Support You Need with Mayfair Legal Funding

At Mayfair Legal Funding, we understand the challenges you face when pursuing a personal injury claim. That’s why we’re here to help with settlement funding loans that can provide the financial support you need during this difficult time. Our application process is simple, and we can often provide funds within 24 hours of approval. Call us today at (888) 357-1338 to learn more about how we can help you!

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Frequently Asked Questions (FAQs)

Can I use my settlement funding loan for expenses other than medical bills?

Yes! You have the freedom to use your settlement funding loan for any expenses you deem necessary, such as rent, mortgage payments, car payments, or groceries.

What happens if I lose my case?

If you lose your case, you typically do not have to repay the settlement funding loan. Mayfair Legal Funding offers non-recourse loans, meaning the repayment is contingent upon you winning your case.

How long does it take to receive funds after applying for a settlement funding loan?

At Mayfair Legal Funding, we strive to provide funds within 24 hours of approving your application. We understand the urgency of your financial needs and work diligently to get you the support you require.

Will applying for a settlement funding loan impact my credit score?

No, applying for a settlement funding loan will not affect your credit score. We do not require a credit check as part of our application process, as the loan is based on the merits of your personal injury case.