Lawsuit Loans Help Keep Cases and Lives Financially on Track

Lawsuits can help victims receive compensation for pain and suffering caused by negligent acts. But cases can drag on for years, making it difficult for plaintiffs to survive financially until they receive their settlement. That’s where lawsuit loans can help. summons and complaint¬†

Lawsuit loans are a unique brand of financing that can be a lifesaver to plaintiffs who are struggling to maintain their finances. They provide a cash advance on expected future court settlements, which can help them meet their immediate financial needs. Most lawsuit loans are used to pay for medical expenses of those who don’t have health insurance. But the funds can be spent on anything, including mortgage payments, car notes and daily living expenses.

Interestingly, there’s no lending actually involved with lawsuit loans. That’s because they’re technically a form of “non-recourse” payment. Repayment on lawsuit loans isn’t due until after your case has been settled. In fact, many attorneys add the cost of this funding into the basic reimbursable costs of the suit when determining damages.

If you don’ win your case, you don’t have to repay the advanced funds. Neither does your attorney or anyone else. So, essentially, companies providing lawsuit loans assume all the risk-not you.

Qualifying for Lawsuit Loans

While personal injury cases are the most common litigation used with lawsuit loans, many kinds of cases qualify for this type of financing. They include medical and legal malpractice, wrongful death, wrongful termination, breach of contract, sexual harassment, employment discrimination and product liability.

In terms of personal qualifications for lawsuit loans, there are none. Because no actual lending takes place, the standard items for loan approval-such as a credit check and employment verification-aren’t required. Instead, companies that provide lawsuit loans base their selection on the merits of the cases they choose. Their goal is to support strong cases with the most likelihood of winning.

For these companies, lawsuit loans are purely an investment tool. If you lose your case, they’ll walk away with nothing. But if you win, they’ll have a legal right to share your settlement. This right is based on the lien that gets placed on your case to secure your lawsuit loan. The lien gives the financing company a legal claim to be repaid when your case is settled.

Given the high risk involved, the companies financing lawsuit loans charge a significantly high fee for the services they provide. Their fee can amount to up to 15 percent of the settlement amount. This may seem like a hefty percentage. But if your case wins, you’ll probably walk away with more money than you would have if you settled early-even after repaying your lawsuit loan.

Exactly how much money can be provided for lawsuit loans? The actual amount depends on the underwriting requirements of the financing company. However, most companies funding lawsuit loans will pay up to $500,000.

Why Lawsuit Loans?

Lawsuit loans can be a viable option for plaintiffs who are straining to make ends meet until their case settles. Many of them lack access to outside funding and are desperately trying to survive. Their family many not be able or willing to lend them cash to tide them over. They could get money from their home equity loan or line, but this could jeopardize their house. And they may not qualify for traditional bank financing because they lost their jobs due to their injury or other circumstances.

However, lawsuit loans can make a world of difference in their case and lives. Here’s how: People pursuing personal injury and other cases are often at a disadvantage in the legal system. Companies with deep pockets can afford to extend cases in an effort to “wait out” plaintiffs who are in dire need of funds to meet their living expenses.

 

« »

Leave a Reply

Your email address will not be published. Required fields are marked *