Lawsuit loans, known also as settlement loans, or pre-settlement funding, is a form or financing that an individual can apply for prior to the proceedings of a lawsuit they’re filing. This sort of financial service exists in order to allow people in less stable financial situations to avoid being victimized or finding themselves unable to seek proper legal retribution.
1. When is a lawsuit loan appropriate?
When a person is injured on the job or wishes to sue a company, business, individual, or former employer, a lawsuit loan if there to help they deal with either the financial demands of the legal proceedings, their cost of living for the duration of the case, or both.
They are structured this way because generally if someone is engaging in a legal battle due to injury at their place of employment or elsewhere, they are unable to work as a result of it. Although disability or unemployment insurance might be helping to cover the day to day expenses, legal help costs money, and this is where a lawsuit load can help.
2. What are some common cases when lawsuit loans can help?
Although not limited to, pre-settlement funding in frequently seem during the follow circumstances: when filing for a personal lawsuit (assaults, work related injuries, negligence), car accidents and other traffic related incidents, injuries that occur on public or private property, injuries and illnesses as the result of medical malpractice, violation of civil rights, and employment related incidents.
3. How a lawsuit loan can benefit you
Of course, the idea is that the funding acquired from a lawsuit loan will enable the plaintiff to help win their settlement, an amount which will hopefully be much larger than the money they initially invest in the loan itself. Additionally, unlike most other forms of loans, the person filing for a lawsuit loan does not have to have good credit in order to receive funding.
Having hired a decent lawyer, the plaintiff, along with the lawsuit loan company can negotiate the terms of the case. In the lender decides that the person has a good chance of winning, they probably won’t have too much trouble securing the funds, even without a credit check.
4. Knowing how risk and accountability works
It is important to note that lawsuit loans generally have more expensive interest rates than regular loans, which is a reasonable condition considering the lender is taking on a bigger risk. That being said, if the plaintiff is unsuccessful in their pursuit, they will not be held responsible for paying off the loan. Furthermore, assuming they do win, yet end up settling for less than they were hoping to, they will only have to hand over the amount they received for the settlement, regardless of the fact that the original loan may have been more.
5. Some other considerations
Despite these special accommodations to make lawsuit sounds lower risk and more accessible, they are still, as all other legal pursuits, expensive. Due to the fact that lawsuits can often be drawn out over several months, if not years, the legal fees accumulate swiftly and steadily.
It is necessary to remember that a good lawyer can charge hundreds of dollars an our just for consultation services, never mind the costs of hiring one for months at a time. It is all about assessing the likelihood of a win, and the lawyer will be able to provide the lender with all the relevant information associated with the lawyer, therefore making a reasonable estimate regarding the chances of success.
6. Deciding whether to proceed
A result of the unique circumstances surrounding these loans is that it is also necessary to go through a specific lawsuit loan company. It is not a service offered by a regular lending company and because of this, the fees will be higher. That being said, if there is a solid case to be made, there is no reason not to act. Depending on where the incident took place, the time period to act could be as little as 2-3 years from when it occurred, so if you believe you have a claim to be made, it is best to get started as soon as possible.