Lawsuit funding or legal funding is a non-recourse lawsuit loan or lawsuit cash advance. It carries no risk because plaintiffs owe nothing if they lose the case. Pre-settlement financing programs provide them with immediate cash to give them and their attorney time to negotiate a larger cash settlement!
Most plaintiffs involved in lawsuits don’t realize that they can get a cash advance before their case is settled. It is called lawsuit financing and is often referred to as lawsuit loan, legal funding, legal funding, legal funding, legal funds, lawsuit cash advance, litigation funding, pre-settlement loan, and plaintiff cash advance. The following 18 guidelines every plaintiff should know about lawsuit loans and lawsuit cash advance. I hope this helps and guides you to make an intelligent and judicious decision while looking for a lawsuit financing or a lawsuit loan.
1. Who is eligible for Lawsuit funding?
If you are a plaintiff, involved in any of the following lawsuits (but not limited to), ie: personal injury, car accident, negligence (medical, legal, construction), employment discrimination, fraud, product liability, breach of contract , mesothelioma, negligence, workers’ compensation, civil rights, class action, patent infringement, whistleblower (qui tam), workers’ compensation (not in all states), wrongful death, business litigation, etc.; and if you are represented by an attorney, you may be eligible for a cash advance or legal financing on your pending settlement.
2. (A) How can I benefit from claims funding?
Many plaintiffs are forced to accept a low offer due to the financial difficulties they experience shortly after sustaining a personal injury. A cash advance on your settlement will allow your attorney the time necessary to obtain the full value of your case.
(B) How would lawsuit funding help me get more money for my lawsuit case? The defendant, to save time and money and settle the case early, will offer you much less than the case is actually worth. If you need immediate financial help, you may feel pressured to agree to an earlier (and often smaller) settlement. Claims financing or a so-called claims loan can alleviate your immediate financial needs and allow your attorney to continue fighting for fairer compensation.
3. What types of cases do pre-settlement funding companies fund?
A good lawsuit finance company would provide cash advances in almost all types of cases. The most common types are listed in fact number 1.
4. Is good credit and employment necessary to obtain a Demand loan?
No, lawsuit financing or statutory financing is not based on credit history, unless there is a pending bankruptcy. The applicant may have a bad credit score and be unemployed.
5. Why can’t I get a bank loan?
Traditional financial institutions, including banks, generally do not make loans solely on the merits of a lawsuit. They consider the practice of lawsuit funding or lawsuit funding to be too risky.
6. (A) Is this a demand loan?
No, this is not a loan. It is actually a non-recourse lawsuit cash advance on the future value of your case. Unlike a loan, if you lose your case, you owe nothing in return.
(B) Why is this not a loan?
Loans are absolutely repayable. A loan is a type of financial aid that must be repaid with interest. But the lawsuit cash advance, legal funding, or lawsuit funding is actually buying an interest in your settlement. So if you lose your case, you owe the finance company nothing.
7. Do I owe any fees or out-of-pocket costs up front? Are there any additional fees, such as monthly fees, involved?
Absolutely not! A good claims finance company should not charge any up-front fees, application fees, processing fees, or monthly fees. There should only be a one-time fee for lawsuit funding or lawsuit cash advance, depending on how long it takes to resolve your case. There will be a specific refund amount, due and payable only after the case is successfully resolved. And if the case is unsuccessful, no refund is required.
8. Will I have to sign any documents? Will my attorney be required to sign any documents?
Yes. You will need to sign an application and after your lawsuit loan is approved, you and your attorney will sign the Financing Agreement.
9. How much can I get as an advance on my settlement?
Claim cash advances are generally limited to 10% to 15% of the projected case value. The minimum advance is $250 and the maximum amount available in a single case is one million dollars.
10. Is the defendant insurance company notified?
No, the only parties who know about the claim finance transaction are you (the plaintiff), your attorney handling your case, and the claim finance company.
11. How long does it take me to get the funds?
If you are eligible, you can get your approval decision within 72 hours of reviewing your case documents. The financing company will transfer the funds from your approved claim to your bank account or may send your funds via FedEx within 24 hours of receiving your signed Financing Agreement via fax from your attorney.
12. How is the demand cash advance returned?
The lawsuit loan is repaid upon the award of the financial settlement of the case. It is paid at the same time the proceeds of the claim are paid to you.
13. What happens if I lose my case?
You owe absolutely nothing in return! The lawsuit loan advanced to you is yours.
14. (A) What can I use the money for?
What you want. it’s your money. You pay your bills, mortgage and car payments. You can take care of your children’s education expenses and pay your medical bills.
(B) What if I need more money later?
If you haven’t received all of the money, the claims finance company may be able to provide you with more cash advances in your case. You may make another request for additional settlement financing or pre-settlement financing at a later date.
15. Is the legal finance company involved in my lawsuit case?
NOT. They have no input or control in your case. They do not get involved in the attorney-client relationship. All management and decisions related to your case are made by you and your attorney. They have no role in pursuing your case. Your only involvement is to initially review your case documents, so they can assess the claim.
16. How will my attorney feel about my doing this?
Lawyers are sympathetic to the financial strain their clients may experience. In some states, attorneys are not allowed to help clients financially, but they can help seek third-party financing, such as plaintiff’s lawsuit financing or lawsuit financing.
You can apply for lawsuit funds without first consulting your attorney. However, your attorney plays an important role in obtaining funds for your claim. Lawyers are usually eager to help a client obtain plaintiff financing because it may mean that a lengthy legal proceeding will not end with the client having no choice but to accept a low settlement offer. The plaintiff’s funding request does not interfere with the agreement between you and your attorney in any way.
17. Why can’t my lawyer lend me money?
The American Bar Association prohibits attorneys from lending money to clients for anything other than case expenses. This prohibition exists to prevent a conflict of interest from arising between her attorney and her client. If you owed your attorney money, you may feel pressured to accept your attorney’s advice to settle your case when you really didn’t want to accept the amount offered.
This would cause a conflict of interest because your attorney would now be your creditor. In fact, the American Bar Association expressly prohibits attorneys from lending money to their clients for anything other than case-related expenses.
18. (A) Is this legal?
Yes. The claim or demand is yours and it is your property, just like you own property. After paying your attorney and medical liens (if any), the potential remaining money is yours. You can sell it or give it away.
(B) Is the process for obtaining lawsuit funds or lawsuit loans confidential?
Yes, the entire process is confidential, private and fast. Insurers review your case documents and determine if they think you have a good chance of collecting your claim. These are the same documents your attorney prepared to fight your case. If they think your chances of winning are good, they’ll offer you a cash advance.