I Filed a Lawsuit But I Was Told My Case Could Take Years… Now What?
If you are the plaintiff in a lawsuit, chances are good that you’re looking to receive monetary compensation. Whether you were the victim of personal injury, discrimination, a motor vehicle accident, medical malpractice—you name it—you have made the decision to file suit against the person or company that has caused you harm.
The fact of the matter is, however, that your lawsuit could take a long time before it’s settled. Even when you are confident that you will receive the settlement money that you are seeking, the time in-between can put immense stress on your bank account. And in that time, you still have a life to lead… and bills to pay.
How Am I Supposed To Pay My Legal Fees?
The legal process can be slow-moving. Many plaintiffs have not considered the financial strain they will incur as they wait for their cases to settle. Your suit may be stuck in limbo as your bank account gets drained. On top of all the extra expenses, you may be unemployed due to injury or because of wrongful termination. Your legal fees and personal bills may be piling up. In any case, you need cash and you need it fast. If you’re wondering how you can survive until your lawsuit makes it to trial, it may be time to consider presettlement lawsuit funding.
What Is Pre-Settlement Lawsuit Funding?
If you’d like a more detailed answer to this question, you can check out our latest article on the subject here. But to summarize, presettlement lawsuit funding is a way to get cash from your case before it’s settled, also known as a presettlement cash advance. Many consumers who have a pending lawsuit and need cash before their cases settle will research a “pre-settlement loan” or “lawsuit funding loans” when what they really need is a cash advance off their pending case.
The reason why it’s a cash advance and not a loan is because there is no recourse from the funding company if your case ultimately fails. That means you don’t have to pay back the funds if you lose your case. No monthly payments; no interest fees. This is part of the risk that companies will assume in providing pre-settlement funding. Unlike a bank, a settlement loan is a no-risk proposition for the consumer, and can provide financial relief in your time of need.
With a lawsuit loan, the borrower has to have collateral and credit, and be prepared to incur fees and interest charges. Since a pre-settlement cash advance is not a loan, credit approval isn’t needed to qualify. Funding is based entirely on the merits of the case, and nothing else.
In addition, a pre-settlement contract offers a previously determined payback amount. No interest or surprise fees. Some companies may seem affordable in the beginning, but with escalating compound interest, you may soon find that you owe the lenders so much that it cancels out your lawsuit settlement. You’ll want to make sure you’re dealing with a reputable lawsuit funding firm so that you don’t get hit with unexpected charges. If you would also like more information on the basics of lawsuit funding, you can learn more by reading Nolo’s article on lawsuit loans and funding.
Is There A Payment Limit?
Plaintiffs are often pressured into settling lawsuits at much lower settlement sums than what they may actually receive at the trial. The right funding company can keep this from happening by obtaining fair compensation for the plaintiff. While your eligibility for receiving advance funding depends on the estimated value of your settlement, normally pre-settlement funding is limited to 15% to 20% of the total estimated value of your settlement.
Why Do People Take a Pre-Settlement Loan Or Cash Advance Off Their Case?
If a person has suffered an injury or loss due to someone else’s negligence, they may suddenly need money to help cover a wide range of unexpected damages such as medical bills and lost wages. Basically, the number one reason that people take funding from their pending lawsuit is to pay their bills. Whatever those bills may be: Mortgage, rent, car payment, utilities, college tuition, surgery, back-to-school costs … Even for starting a new business or financing a vacation; anything that the consumer wants to use the money for, they can. The choice is up to them to decide if a monetary influx is important to their needs at this time.
Most law firms will caution their clients to only settle in advance if they have nowhere else to turn for relief. A lawsuit funding firm, however, will get you your cash in hand without fighting through a labyrinth of red tape.
What Kind Of Cases Qualify For Cash Advance Funding?
Most funding companies focus their efforts on automobile accident and personal injury cases. Personal injury cases can include slips and falls, premise liability, medical malpractice, and construction accidents, amongst others. However, many funding companies will consider almost any case in which there is a liability, damages, and insurance, such as wrongful termination, discrimination, sexual harassment, sexual abuse, and more. Plaintiffs have been awarded a cash advance for lawsuits of every kind. A good lawsuit funding company will find a way to get you the money you have coming to you.
Okay, So How Do I Find A Reputable Lawsuit Funding Company?
If you’re looking to obtain presettlement lawsuit funding, the first thing you’ll want to do is speak to your lawyer, or at the very least, your case manager. He or she will be able to point you in the right direction toward a funding company that specializes in legal funding for lawsuits, and one that will be able to expedite your approval process. If your lawyer can’t direct you toward a lawsuit funding company, it may be time to take matters into your own hands.
A simple internet search is a good way to get started. You can search terms like “presettlement lawsuit funding” or “lawsuit funding loans” or “legal funding for lawsuits.” It will be best to also specify your state, and it couldn’t hurt to plug in a few relevant keywords about your type of case. That will ensure you receive the most relevant search results for lawsuit funding companies that will be a good match.
The most important thing in picking a funding company is to ensure that they are a direct funding source. What this means is that if you call a funding company and they are simply a broker sending your case to another funder, then most of the time you are going to pay more because of broker fees. The top rated funding companies want you to get a fair deal; those are the ones you want to work with. It will be important to ask the right questions to make sure the funding company you’re planning to work with will be a good fit.
Lawsuit funding companies are in growing demand for plaintiffs nationwide. Litigants can choose from a large pool of companies, but not knowing how the industry actually works can impede your ability to select the company that is best for you. If you applied with another company in the past and were denied, it’s possible that you simply selected the wrong people to work with. It may seem overwhelming at first, but asking the right questions will help you zero in on your options.
What Questions Do I Need to Ask?
You probably have a list of concerns or questions that you’d like to address before proceeding. Maybe you’re not even sure what you need to know. In any case, the funding company should be able to inform you about any details regarding your contract. You want to be sure you fully understand the terms of the agreement before going ahead and signing anything. For example:
Are there any hidden fees I need to be aware of?
How much money can I advance from my lawsuit? Can I get a cash advance more than one time?
How quickly will I be expected to repay the advance? Will interest be charged?
Is same day funding possible?
How Do I Get Approved?
The approval process is pretty straightforward and easier than you might think. The first step will be to fill out a preliminary application with the funding company. Generally, the information they are looking for will be your basic contact information, the type of case you’re litigating, and the name and phone number of your attorney. There is no application fee or credit check.
Once the application has been completed, the funding company will immediately contact your attorney to request any legal documents that can assist them in evaluating your case. Most funding companies won’t ask your lawyer to fill out a lengthy application on your behalf; they simply need to request a few key documents to help assess the merits of your claim.
Once the lawsuit funding company determines there is merit to your case, you will very likely be approved and a cash advance can be obtained within days.
Days? No way! How Long Does It Really Take?
Obtaining cash funding for lawsuits can be a very expedient process. While the course of action may take longer or shorter periods of time depending upon your specific situation and case, if you’re dealing with an efficient presettlement funding company, the time from application to cash-in-hand can be as little as 48 hours.
In most cases, funding can occur within 24 hours of sending back a fully executed agreement that is signed by you and your law firm. Funds will be deposited directly into your bank account or a check can be overnighted to your home. All you need to do is provide the funding company with either your banking information or address where you will receive your funding check.
What’s This Going To Cost Me? Are There Any Application Fees Or Upfront Charges?
Some shady pre-settlement funding companies charge an application fee, an origination fee or some other kind of bogus processing fee which can cost hundreds of dollars, but a reputable funding firm won’t have upfront costs. Your application should be reviewed for free. Any payback fees should be lain out clearly in your contract before you sign.
Costs can range from 1.99% per month to 3.99% per month in compounding interest. Most have rates ranging from 30% to 60% annually, and there are also different types of contracts that charge no more than 200% of the amount funded. Every funding company is different, but the money is not free. Remember, the funder is taking a risk by investing in your case since they don’t get paid back if you lose. So, naturally they need to get a competitive return.
It is important for a consumer to speak to a reputable company that has fair rates and fees to ensure that when it comes time to settle your case, your settlement loan company doesn’t take the lion’s share of the settlement.
This All Sounds Perfect. How Do I Get Started?
Well, as mentioned before, you’ll definitely want to speak to your lawyer. He or she can help you with the process if you ask their advice. They may also discourage you from taking funding on your case. It’s never a bad thing to take any legal counsel under consideration, but ultimately the decision is yours.
If you decide to proceed, do some research first. Find out which funding company will best suit your needs. Then give them a phone call and ask some questions. If all goes well, the funding company will ask you to fill out their application. They will then contact your lawyer, receive the relevant documents regarding your case, and review your lawsuit. If the funding company feels that your lawsuit has merit, they’ll approve your application, draw up the contracts, and get you the money you have coming to you. It really is as simple as that. If you have more questions about lawsuit funding or about settlement loans then visit our FAQ page. Feel free to contact us for more information on how you can obtain lawsuit funding.