Lawsuit loans can be confusing to plaintiffs in a personal injury case who need money, as this type of funding isn’t really a loan at all, but an advance against your own anticipated settlement in a lawsuit. In some cases, your attorney may suggest contacting a litigation funding company. How does this work, and when it is appropriate to seek out this type of financing?
Pre-settlement funding is appropriate for those who sustain injuries serious enough to impact their lives in that they cannot work, are faced with reduced income due to time spent in court or for medical treatment or rehabilitation, or who have substantial costs associated with disability or medical care. Litigation in these types of cases can take months, and in rare cases even years to settle. In the meantime, the injured litigant must have sufficient money to live – to pay bills, medical expenses, buy groceries, etc. For some, it simply isn’t an option to wait for the lawsuit to end in order to get money to survive. This is when lawsuit loans can be very beneficial.
How does the process work?
Basically, your attorney will provide the funding company with information regarding your case; information about your injury, how it occurred, medical reports, etc. This information is how funding companies determine if the case is strong enough to merit approval of an advance. Credit score, employment status and other factors do not come into play when deciding whether you’re eligible.
If approved, you will be advanced a percentage of your expected settlement, typically about 10% with most companies. In most cases, you will get the advance quickly, within 24 hours or even the same day.
While there are fees associated with lawsuit advances, they are not repaid until the time the advance is repaid to the funding company, once your lawsuit is over and you have won or settled your case. Some companies charge a flat fee, while others may work on monthly fees that accrue over the months the advance is outstanding. Either way, you only repay the advance along with fees when you actually have the money to do so. No monthly payments, no up-front fees or other costs to pay initially.
What happens if to your surprise, you do not win your lawsuit? With pre-settlement funding, you only repay the advance if you do win; otherwise, you pay nothing at all. Essentially, you are at no risk financially because you only repay the funding company if you do collect compensation from the negligent person or party who caused your injuries.
Lawsuit funding companies choose the cases they fund very carefully, choosing those they feel confident will win in order to minimize their own risk. You must have an injury attorney who is representing you in your case, as this further supports the fact your lawsuit is one that’s viable and likely to win.
If your injury or injuries have impacted your life in a way that affects you financially and could prevent your continuing your lawsuit to its completion, talk to your attorney today about lawsuit loans. At Addison PSF, our goal is to help you avoid financial disaster while fighting for the full damages you deserve from those who were negligent.