Here's How I Price A Settlement Before I Quote A Fee.
Every client asks what their file will settle for, and I never guess. I price from the last file that looked like theirs. Four variables decide it. How old the default is, whether a judgment exists, how clean the funder's paper is, and how many positions are stacked. Read those four and the range writes itself.
Age first. Fresh files settle high because the funder still sees a performing borrower. Aged files settle low because the funder sees risk. Last fall's dentist file was eleven months in, which is the sweet spot. Old enough to discount, young enough to document. Bucks County practice, $94,000 advanced, associate gone, production down 30 percent.
Paper second, and this is where files get interesting. Her books were clean, which helped. But the real gift was two reconciliation emails she'd sent herself the previous fall, frustrated, no lawyer, no strategy. The funder ignored both. Ignored written requests are exhibits with timestamps. I told her those emails were worth ten thousand dollars. She thought I was joking.
Stack third. Single-funder files command premiums because one funder means one ego and one approval chain. Five stacked advances mean five desperate funders undercutting each other. Hers was single, which cost her about five cents on the dollar. Still worth it. Single files close in weeks. Stacks close in seasons.
Judgment fourth. No judgment in her file, which kept every option open. Judgments don't kill settlements, but they add a vacatur fight to the bill and harden the funder's posture. Pre-judgment files negotiate. Post-judgment files litigate first and negotiate second.
The rounds went eleven weeks. They opened $81,000. I countered $25,000 with production reports attached. They came back $52,000. Three weeks of silence, which I told her meant authorization, not failure. Closed $31,000 lump sum. Thirty-three cents, middle of the range for a documented file with ignored demands.
She asked if the timeline was normal. Eleven weeks of talking feels endless and costs nothing extra. The expensive waiting happens before you call. Clients always ask about how long settlement takes, and the honest answer is months of mostly waiting between six actual conversations.
One more thing. Never accept the first number and never pay a dime without a signed release covering the business, the owners, and every related claim. The price is only half the deal. The paper is the other half, and it's the half that keeps you safe.