Lawsuits can put you in a terrible financial situation. You may want to find ways to make ends meet and pay bills.
Thus, lawsuit settlement funding is a viable option when stuck in this situation and would need cash to settle different expenses immediately. Examples include rent, mortgage, medical expenses, car payments, college fees, and utilities.
If you’ve been wondering how lawsuit settlement funding works, this is the right place. Read on to understand the nitty-gritty details.
What Is Lawsuit Settlement Funding?
Lawsuit settlement funding is given to plaintiffs with personal injury suits. The injured individuals acquire cash to survive while their case is ongoing. While you are in this situation, pre-settlement funding can help you manage your necessities. The funding gives you the freedom you deserve while you continue fighting for your case. You can repay the loan once the funds from the settlement are distributed.
This financial assistance is only available while a case is pending. Most lawsuit firms will advise their clients to opt for settlement loans only if they’ve exhausted all the other options.
The interest rates for this funding can be a bit high. Lawsuit loan fundings often risk giving you the cash. When you lose the case, they won’t get anything.
Nonetheless, the interest rates are usually high when you win. Thus, the loan companies take a huge chunk of the settlement. Since different settlement companies have different interest rates, shop around before settling.
How Does Settlement Funding Work?
Several reasons may prompt a lawsuit funding company to offer you money. However, before they decide to fund you, they’ll have to vet you first.
There is no guarantee that you’ll get the funds, even after meeting all the qualifications. Sometimes you might qualify, but the money you get is less than you expected. The legal funding companies often lookout for the risks involved.
You have to sign a contract before any cash is issued. The contracts normally highlight the repayment process and what the company would claim at the end.
Credit score plays a smaller role in determining whether you’ll get the funding or not.
Before settling for any legal funding, here are some things to do.
- Do your research – You have to understand what lawsuit settlement funding is and how the process works. Also, understand the different terms and conditions before signing any contract.
- Assess all your financial options– This is a short-term fix to help you with your financial needs. The interest rates are also high. Thus, before settling for this, be sure that you need it.
Who Needs a Lawsuit Settlement Loan?
Here are some situations that may prompt personal injury settlement loans:
- Work-related accidents
- Car accident injuries
- Medical malpractice
- Wrongful death of a loved one caused by cases of negligence
- Product liability case( accident caused by a malfunctioned product)
- Personal injury case ( an accident caused by someone carelessness.)
- Dog bite injuries
- Faulty medical equipment (i.e. hip implants, transvaginal mesh)
What Are the Requirements to be Eligible?
Before applying for the funds, you must meet certain criteria. Here are things that make you eligible for pre-settlement loans.
Have a Valid Lawsuit
This is the most obvious criterion for determining your eligibility. You need to have a personal injury lawsuit in progress. The lawsuit should be filed in court. Nonetheless, most personal injury claims are solved before getting to court.
Have an Attorney
You need to look for an attorney or a law firm to represent your case. The law firms reach out to attorneys to structure all the repayment agreements. You stand a good chance of getting the compensation when represented by a lawyer.
Pros of Settlement Funding
Settlement funding comes with advantages. Some of these advantages include:
Eases the Financial Strain
Most people take funding from their pending lawsuits to pay their bills. The best thing about these loans is they give you the chance to pay your bills and manage the legal fees.
Settlement funding gets you the money to live comfortably.
Less Expensive Than Bank Loans
Settlement lawsuit funding isn’t a bank loan at all. However, it is a great option if you have a pending lawsuit and need a loan.
Here is the catch, there is a low risk that comes with the loan. If your lawsuit fails, you won’t have to pay back the funds if you lose the case. There are no interest rates and no monthly payments.
Funding is usually based on the merits of the case. There is no need for credit checks.
Achieve Peace of Mind
After getting the settlement, you don’t have to worry about the details of the lawsuits. Lawsuits can cause unending stress. Since the court processes usually take time, you don’t have to worry about your finances.
It also supplements your income as you are looking for work if dismissed from work due to several reasons.
Here are some situations that may force you to opt for lawsuit settle funding:
- You are scared about going to trial and then losing the lawsuit. If you take the money now, you are assured that you will get partial money. No matter what happens, you still get a little settlement.
- If the defendants’ insurance company wants you to take a lower cash settlement. You also know if the settlement would be worth more in the end.
- You need to pay for medical service and you can’t afford the cost.
- You aren’t working now and need funds to help you survive.
Recovery should be your priority when you get involved in an accident that results from someone’s fault. Unfortunately, the damages inflicted could affect your daily life and tamper with your financial flow.
You can always sue the other party. While the case is ongoing, seek lawsuit settlement funding to help with your expenses. Also, different legal funding companies have different terms and conditions. Ensure to pick one that has your best interest.
Discuss with your lawyer and let them help you out with the process.