Why was my Lawsuit Funding Application Denied?

Bridgeway Legal Funding |

Did you recently apply for lawsuit funding and your application was denied?  Our goal in this article is to help applicants understand why they may have been denied.  

Common Reasons for Denial

Too Soon

If your accident just happened yesterday it’s hard for the funding company and your attorney to know what your case is worth.  Chances are you are still treating and haven’t reach maximum medical improvement (MMI).  Try calling the funding company back 90 days after the date of the accident and you will have a better chance of being approved. 

Prior Funding/Overfunded

There are dozens of lawsuit funding companies out there.  However, you can only borrow from one funding company at a time.  Most companies will ask you if you have already borrowed against your case and if you’re not up front with them they may decide you’re not trustworthy enough to lend to.  Funding companies can find out if you have a prior advance through industry databases and may also ask your attorney. 

If a case is overfunded that means that you have borrowed too much money relative to the value of your case.  For example most lawsuit funding companies are willing to advance up to 10% of the estimated value of your case.  If they think your case is worth $100,000 they may offer you up to $10,000.  However, if you already owe $20,000 against your case then you’re unlikely to be approved because you’re above the 10% limit. 

Liability is Questionable

Liability is a key determinant to the value of your case.  If it’s unclear who is at fault for the accident this can cause your application to be denied. 

Pre-existing Injuries

If you’ve had prior injuries to the same part of your body, that will make it more difficult to prove that the injury was a result of the accident. 

No Insurance/Not Enough Insurance Coverage

Insurance is also a key determinant to the value of your case.  If the party who is at fault for your injuries is not insured or has a small amount of insurance then it will be hard to get paid. 

Can’t Fund in Your State

Some states have regulations that are stricter than others.  Because of this some funding companies choose not to do business in those states. 

Child Support Liens

If you have any past due child support when your case settles it will be deducted from the settlement amount.  This makes it more difficult to borrow against your case since it leaves less money at the end of settlement and increases the chance that the funding company will lose their money. 


If you file for bankruptcy near the date of your settlement then your settlement can be considered part of the bankruptcy estate.  Since this puts your settlement at risk you are less likely to get funding on your case. 


If you don’t have an attorney yet you will need to get one to borrow against your case.  Your attorney signs off on the contract that when your case settles the funding company will be paid back. 

If your attorney does not want you to borrow against the case they may not agree to sign the contract.  If your attorney does not sign the contract then the funding company won’t give you any money. 

Asking for too much

Your application may be denied if you ask for too much money.  Some clients ask for 10s of thousands of dollars even when they don’t need that much.  Most funding companies are willing to give you 10% of what they think the case is worth.  Try asking for the bare minimum amount of money you need.  You’re more likely to get approved by asking for less and the less you borrow the less you’ll have to pay back when your case settles.