Contrary to the name, lawsuit loans are not “loans” at all but a cash advance against a pending settlement for those involved in a personal injury lawsuit. When you are an injury victim in need of cash, financial issues can develop during the course of time it takes for a lawsuit to reach completion. Essentially, when you want to obtain an advance against your settlement, it is considered “no recourse litigation funding.” This simply means that if for any reason you do not win your lawsuit, you do not repay the advance.
Because the process is no recourse, the plaintiff is at no risk – in other words, in the event you lose your lawsuit you do not owe money to the litigation funding company that you do not have. Lawsuit loans allow those who qualify to get a portion of their expected verdict or settlement immediately, usually within 24 hours. How much you may be advanced depends upon the funding company you secure the advance from, but most offer about 10% of the expected settlement.
What can lawsuit loans be used for? Most injured victims involved in a lawsuit find that when they cannot work, it can be hard to pay the bills or buy groceries. You can use the advance to pay medical and other bills, utilities, to buy groceries or pay attorney fees so that your lawyer has the financial resources to fight vigorously on your behalf.
How do you repay the money? Most litigation funding companies do not require payment on a monthly basis; after all, this would only add to your financial burden. You will not be required to repay the advance or any associated fees or interest until the time that your lawsuit has been won, and you have your money in hand. Any money that is left after you repay the funding company is all yours, free and clear.
Should you apply for a lawsuit loan? You will need to first discuss this form of funding with your attorney. Should the two of you decide this is a good option for you, your lawyer will prepare the information the litigation funding company needs in order to determine if you qualify. Whether you have bad credit or are unemployed makes no difference; the funding company only wants the information relevant to the accident/circumstances which caused your injuries, and the details of your injuries themselves. This helps them determine if you have a strong case that will likely be won.
Lawsuit loans are one way to experience financial relief, so that you can live comfortably and as you normally would while waiting for your lawsuit to settle. Talk to your attorney, who can further explain the process and help you decide if it is right for you.