Lawsuit Loans and Their Benefits to Personal Injury Victims
Dec 15, 2011 Legal Finance
Although the term is a bit misleading, lawsuit loans are actually cash advances on a plaintiff’s anticipated lawsuit settlement. When you have been injured because of someone else’s negligence, you may find yourself in court for months or even longer in an attempt to reach a fair settlement. Litigation funding is designed for those who are facing financial difficulty due to the added expense of medical bills and the inability to work due to their injuries or time spent in court fighting for their rights.
What are the benefits of lawsuit loans?
If approved, you do not have to wait for months or even years to gain access to your money. Generally, you will have a portion of your expected settlement in just 24 hours.
There is no physical collateral required. Your expected settlement is your collateral.
There are no credit or background checks involved, nor will your employment records be checked. Litigation funding is based entirely on the merits of your lawsuit.
There are no up-front or out-of-pocket expenses involved. If you receive a loan, you will only repay the funding company once you have your money in hand – no monthly payments to add to your already burdened financial situation.
The funds can be used for medical expenses, attorney fees, household bills and even repairs to your car if it was damaged in the accident that caused your injuries.
Lawsuit loans are non-recourse, which simply means that in the event you do not win your lawsuit or receive settlement from the insurance company, you are not responsible for repaying the litigation financing company. This offers a measure of comfort to most plaintiffs, who wonder how they will ever repay the loan should they not receive a settlement.
The amount you may be entitled to depends on how much your settlement is worth. For example, if you expect to win $80,000, you may be approved for a loan of approximately $8,000 – usually around 10% of your expected settlement. Lawsuit loans are usually given in amounts that range from $500 to as much as $250,000 or more.
If you receive structured settlement payments instead of a lump sum, you can repay the settlement funding company with a portion of those payments, so that you are never out any additional money. Lawsuit loans make it possible for injury victims who might not have otherwise been able to make it through a long, drawn-out lawsuit to live comfortably and pay their bills while waiting on settlement.
Your attorney will submit the necessary documentation to the litigation funding company, who will then review it to determine if you qualify. If so, you will have the funds you need to stay on track financially, so that you can continue to fight for the full compensation you deserve. Talk to your lawyer about the benefits of lawsuit loans, and whether it is a sound option for you.
