Lawsuit Loan Denied? This Might Be Why.
Finding out your lawsuit loan was denied is frustrating and disheartening, but this article will shed some light on why it happens–and what to do next.
Do money problems have you up at night?
About 77% of Americans worry about their finances. From paying rent to putting food on the table, money can be a great source of anxiety. If you’re dealing with the strains of a lawsuit, it can begin to feel as if you’ll never be able to make ends meet.
Thankfully, if you have a strong case, with enough equity, you could be eligible for a lawsuit loan. What is equity exactly?
Equity refers to the amount of settlement money remaining after covering all of the case related expenses. If a case doesn’t have enough equity, presettlement funding company’s will be hesitant to work with you.
What are the other reasons that will cause a loan denial? Read on to find out!
Does the state you live in allow lawsuit funding? If you recently received a lawsuit loan denial, it could be due to the fact you live in a state that doesn’t allow lawsuit advances.
In some cases, plaintiffs try outsmarting the system by applying for a loan out of state. However, pre-settlement litigation funders have to verify that you’re a resident of the state where you’re applying for the loan. If you live in a state that pre-settlement companies don’t operate in, you won’t be able to receive any type of loan for your case.
Case Is Fresh
If you’re legally eligible for funding, but can’t secure a loan, your case may be too fresh. Documentation is a vital part of any lawsuit. If your case is brand new, the documentation might not be in place yet for a presettlement funding company to back you. For example, you’ll need a copy of the police report, along with medical documents.
If the documents aren’t available, won’t have the information they need to determine if it’s safe to loan you money. Instead of applying for funding immediately, you should wait for your attorney to give you the green light.
No Attorney Present
If you don’t have a lawyer, getting a loan from any funding company is almost impossible.
Why is having a lawyer so important? If you don’t have a lawyer, the chances of winning your claim and getting the best payout possible go down.
Whereas, having an experienced attorney means you’ll be more likely to win your case, while also seeking out the maximum damages you qualify for. An attorney will be able to help answer all of your settlement-related questions, like whether or not your award payout is taxable. Next, your attorney will be able to walk you through the application process to boost your odds of being approved for your loan.
Free Consultation and Contingency Plan
If you don’t already have an attorney working on your case, now’s the time to secure one. If you can’t afford a lawyer, don’t worry. Oftentimes lawyers are willing to work on a contingency basis. A contingency basis means that if you don’t get paid, the lawyer doesn’t recover any money either. You can also request a free consultation where you can discover the likelihood of winning your case.
If your case is weak, you might decide to forego applying for a loan altogether. However, if you have a strong claim, and legal representation, you can start the loan application process with confidence!
What’s worse than not having a lawyer? Having an inexperienced lawyer on your side. It takes roughly 7 years to become a lawyer. However, it takes a lot longer than 7 years to become familiar with the legal system.
An experienced lawyer will be able to hold your hand through the loan application process. They’ll assist you with documentation, along with helping you verify the details of your repayment instructions. If your case is too new or doesn’t qualify for funding, a reputable lawyer will let you know upfront so you don’t waste any of your time.
Another reason your loan could be denied has to do with liability concerns. Presettlement funding companies shy away from providing loans to anyone who could be found at fault. For instance, let’s say you have a personal injury claim for a car accident.
If there’s a chance that you could be found partially at fault for the crash, your presettlement loan could be denied. Funding companies prefer to back individuals who have are fault free and can provide strong supporting evidence.
Inability to Repay
Moving on, your current financial position can also impact the outcome of the loan application. The average American household has an income of roughly $75,000. However, that number can vary greatly from house to house, especially if unemployment is an issue.
Unfortunately, if presettlement companies doubt you can repay the loan, you’re not going to be approved. To increase your chances of being approved, only apply for the amount of money you need to get by.
Funding Limit Reached
Last but not least, your lawsuit loan could also be denied if you’ve maxed out your funding limit. The financial strain of dealing with a lawsuit causes some individuals to take out multiple loans. If a funding company sees you already have 2-3 loans out for your case, they may be hesitant to provide you with another one.
It’s not to say it’s impossible to have over 3 loans, it’s just more difficult. To qualify for multiple loans you’ll need to have a steady income, as well as an air-tight case.
Securing Your Lawsuit Loan
Having your lawsuit loan denied doesn’t have to be the end of the road. If presettlement funding is legal in your state then you owe it to yourself to apply for another loan. When you apply you’ll need to provide the name of the lawyer who’s representing you.
If you don’t already have a lawyer, reach out to one today to set up a free consultation. Still, have questions about the presettlement funding process? Reach out to us using our contact us page, and we’ll be happy to help!