If you are an individual who was injured because of someone else’s negligence, you may have heard the term “lawsuit loans” and been curious as to exactly what this means. Rather than an actual loan, lawsuit loans are simply a cash advance that is given against an expected settlement to an injured victim awaiting resolution of his/her claim. If you feel that you have a strong case, it is likely you will qualify for litigation financing.
Why do injury victims need lawsuit loans? Frequently, victims find themselves facing severe financial issues, which may by due to extensive medical costs related to their injuries, lost income when they are unable to work, etc. However, creditors are not forgiving; they still expect to receive payment, regardless of your circumstances. While you are awaiting settlement, you may be getting deeper and deeper into debt. This is where litigation financing comes in; your attorney will work with you to determine if lawsuit loans are an option you may want to consider, so that you can live comfortably and avoid money problems while waiting for compensation.
There are several advantages offered by lawsuit loans that you don’t find with conventional loans. First, there are no out-of-pocket expenses, and you will never be asked for information regarding your credit score, employment or other background details. Litigation financing companies are only interested in the details of your accident and resulting injuries, nothing else. Second, if you do not win your lawsuit for any reason, you do not repay the advance. Third, you will not be required to make monthly payments to repay the loan, and only repay the money once you receive your settlement. Essentially, those who qualify for lawsuit loans are at no risk whatsoever.
How much will you be advanced if you qualify? Generally speaking, most litigation financing companies advance approximately 10% of your expected settlement. For example, if your attorney expects that you will be awarded $125,000, you will likely qualify for about $12,000 to $13,000. Lawsuit loans allow you to pay household bills, buy groceries, pay medical expenses and other costs. This means that you are never forced to settle for far less than you are entitled to from the insurance company, which many injury victims do simply because they desperately need the money.
With lawsuit loans, you will pay a small fee and interest when you repay the advance. However, most individuals find that even after repaying the loan, they keep far more money than what the insurance company offered. Discuss the possibility of litigation financing with your attorney today, and put your financial worries behind you.