What exactly is lawsuit funding? There many terms used for lawsuit funding. Some of the more common terms are lawsuit loans, settlement loans, litigation funding, lawsuit cash advances, etc. However it’s important to realize that this form of funding is not an actual loan.
If they were loans, it would be necessary for you to repay them, irrespective of the outcome of your lawsuit. However, these are referred to as non-recourse transactions. In such transactions, individuals are only required to repay the funding if they win their lawsuit.
It is important to realize that the principal criterion that will be utilized to determine whether you will get the funding requested is the strength of your case. The lawsuit funding company will only advance approximately 10-15% of the anticipated award of the underlying lawsuit. Remember, you only need to repay that funding if you win your case.
Why would individuals pursue lawsuit loans and settlement loans? Principally because they level the playing field for plaintiffs. Customarily, entities defending against your claim will include insurance companies, large manufacturers, banks, etc. These entities customarily have deep pockets and are able to protract the litigation and drive costs of litigation up to the point that the plaintiffs must fold. They realize that most plaintiffs will run out of money before they are able to reach a settlement with the insurance company. collection laws in California
For example, in cases such as slip-and-fall and auto accidents, many individuals will either lose their jobs or be unable to continue their jobs for extended periods of time. Many of these individuals sustain severe injuries. Sadly, in some instances these individuals suffer life threatening and irreversible damage as a result of these occurrences. Such instances result in about 3 million cases per year in the US.
Lawsuit funding will often allow plaintiffs to pay their medical bills, mortgages, and other household expenses. The biggest problem is, most plaintiffs aren’t even aware of the fact that they can obtain lawsuit loans and settlement loans. The truth is, plaintiffs can qualify for funding ranging anywhere from $250 to more than $1 million for an individual case. In fact, in some commercial cases, plaintiffs are able to obtain $10 million in funding.
Lawsuit funding will often allow plaintiffs to get out from under tremendous financial stress. How does it work? It’s relatively simple and relatively straightforward. The plaintiff simply fills out an application and submits it to the litigation funding company. That company will then contact the plaintiff and his/her lawyer and ask various questions related to the background of the case (e.g., classification of the case, when the case occurred, where the case occurred, etc.).
Lawsuit funding company will forward a contract to the plaintiff and it will be necessary for both the plaintiff and the attorney to authorize the funding company to obtain requisite information and to forward the funding requested to the plaintiff. How quickly are plaintiffs able to get their funding? In many instances, money may either be transferred directly to the plaintiff’s account or the funds will be sent via FedEx.
What are some of the advantages of lawsuit loans and settlement loans? Litigation funding offers many advantages. Primarily, it is a confidential transaction. These transactions are both prompt and discrete. In fact, the borrower incurs no risk.
There will be no processing of any fees unless and until the plaintiff prevails in the underlying case. There are no credit or employment checks required. Neither bad credit nor the absence of credit will have an adverse effect on your ability to obtain such funding.