All About Personal Injury Lawsuit Loans
It is extremely difficult to fight a lawsuit on your own. You need to devote a lot of time, money and resources to pursue a lawsuit and it is certainly not an easy task. A personal injury lawsuit loan offers effective financial relief all through the litigation process. It may not be considered to be a loan strictly in the conventional sense and it may be regarded more as a cash advance that is given against settlement proceeds from your case in future. Personal injury loans are also, referred to as lawsuit cash advances, non-recourse financial assistance and pre-settlement funding. Personal injury lawsuits may take months or even years. But you need to carry on with your life. You need to pay your utility bills, child support, rent, car payments, mounting medical bills etc. among so many other financial obligations that you need to meet on a regular basis. Because of your injury you may not be in a position to work and you may simply not able to make ends meet. In such a situation your best bet is to apply for a personal injury lawsuit loan. There are numerous reputed and reliable lawsuit funding companies you could get in touch with.
The Loan Process
The collateral for the lawsuit loan will be the future jury award or the settlement from your personal injury lawsuit. You do not usually need to present any other guarantee or collateral to get your loans approved. You do not need to bother about your credit rating. If your lawsuit settlement seems enough to take care of the loan, you need not worry about no credit or bad credit, your loan would be granted anyway. You may apply for personal injury loans to a number of legal funding companies online. You are required to furnish detailed description of your case along with the contact information of your attorney. The next step is verification by the loan company. Once the company has spoken to your attorney, they forward your application to any insurance company of their choice that is known to underwrite such loans.
Their legal experts go through the nitty-gritties of your case and try to compare your case with other cases that seem similar to yours. They correlate between similar cases and yours and concentrate on studying the average settlement amounts for such cases. They would then brief the loan firm about their findings. If the loan firm is convinced that your case has the potential to get a settlement amount that would be enough to repay their funding, they would at once get in touch with you and arrange to process the funds to you at the earliest, often as early as, within 24 hours. The litigation funding companies generally grant maximum 10% of the expected settlement amount. Though the amount doesn’t seem very impressive, it is enough for settling your day to day bills till you get full settlement. One important point to take note of, is that even if you lose, you owe nothing to the loan company.
Main Advantages of Lawsuit Loans
Personal injury lawsuit loans come with zero risks for the plaintiff. You do not require to pay any upfront fees to the litigation company. You are entitled to free case evaluation and also, if you lose the lawsuit, you are not obligated to repay the firm. No payback or payments are required until the case has been settled. The litigation company does not insist on any monthly payments until your lawsuit has been settled. You may use your cash advance freely as per your requirements without any worries of repayment until you have actually, received the lawsuit settlement award.
Some Disadvantages Associated With Personal Injury Lawsuit Loans?
Personal injury lawsuit loans generally are quite small. However, since litigation funding companies are not regulated by federal and state law, they usually charge astronomical interest rates sometimes as high as 50% per annum. Recurring monthly fees are charged by some firms whereas, others end up charging a flat fee plus interest charges. The tension of ever mounting debts to the firm, may lead you into settling your lawsuit as quickly as possible and may be for even less than the settlement amount you are entitled to. Even though you gain a substantial settlement, you still would need to pay the fees for your attorney. It would be necessary for you to repay the loan in much higher amount than the originally borrowed sum.
Tips to Follow While Applying for Lawsuit Loans
- Choose a litigation funding company that offers the lowest rate of interest. Find out about all hidden administrative charges.
- You must find out the exact amount you would have to pay the company against the loan at the time of settlement.
- Stay away from loan brokers. They charge exorbitantly. You should directly consult and deal with litigation funding companies.
- Remember not to sign any agreements or contracts without getting them reviewed by your attorney.
- Your attorney works in your best interests so you must listen to him and follow his advice.
So, Keep in Mind These Tips
Author Bio: Patrick Smith is a partner at an established law firm, and is a revered member of the legal community thanks to his vast experience of the legal system. He has recently taken to writing a number of advisory articles to potential clients, about several aspects of the legal process, including the role of lawsuit funding companies.