Lawsuit funding is a way for people to cover the costs of their medical bills and basic living needs while they wait for their lawsuit to reach a resolution in the courts. Too often, plaintiffs end up settling for less than they deserve simply because they are in financial straits. They may be wondering how much lawsuit loan fees will cost and if obtaining presettlement funding will be worth it. Realistically speaking, though, is that a lawsuit loan can get you the cash you need to wait out your case; precedent has shown us that the longer you can hold out, the higher amount you may receive for your settlement once all is said and done. But of course, there are certain things to consider prior to obtaining presettlement funding. Like…
How much are lawsuit loan fees going to cost?
Upfront? Nothing. At least if you’re dealing with a reputable lawsuit funding company. There shouldn’t be any charges for filling out an application, and you won’t be expected to start paying back your loan until after your case settles. That means no monthly payments until after your lawsuit has made its way through the courts and a final ruling has been passed.
Which is a good thing, because if you are looking for financial relief in your time of need, the last thing you’d want to do is add to your debt. But if you have a pending lawsuit and need cash before your case settles, presettlement funding may provide a way for you to keep up with your bills without having to resort to taking out a conventional loan. Because in actuality, pre settlement funding isn’t like a bank loan at all, and a much better option for a way to obtain some much-needed cash.
Here’s why: Pre-settlement funding offers a much lower risk than a bank loan because there is no recourse from the funding company if your lawsuit ultimately fails. That means you don’t have to pay back the funds if you lose your case. No monthly payments; no interest fees. The funding companies will assume all the risk with pre-settlement funding. Just try to get a deal like that through your bank! With a bank loan, the borrower has to have collateral and credit, and be prepared to incur fees and interest charges no matter what. Since pre-settlement funding is not a loan, credit approval isn’t needed to qualify. Funding is based entirely on the merits of the case, and nothing else. And your lawsuit loan fees will be minimal.
Minimal sounds good, but just exactly how much will those lawsuit loan fees cost me?
The good news is that you don’t pay back anything if you lose your case. But, if you do win, you will be expected to pay back the lawsuit loan company the money you were advanced, along with some additional fees. To put it bluntly, pre settlement lawsuit funding can be expensive. The funder is taking a risk by making an investment in your case. Remember, they don’t get paid back if you lose. So, naturally they need to get a competitive return to make up for any losing cases they invest in. Every funding company is different, but the money is never free.
Some pre-settlement funding companies charge an application fee, an origination fee or some other kind of processing fee which can cost hundreds of dollars, but the best pre settlement funding companies won’t have upfront costs. Your application should be reviewed for free, and any payback fees should be lain out clearly in your contract before you sign. If you don’t like the terms of the contract, you can simply deny the funding and move on.
Bottom line: 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. A conversation with your lawsuit funder will give you a more comprehensive idea of any costs.
This sounds a little confusing
Lawsuits are almost always confusing. And presettlement funding can seem even more so. So, it’s only natural to be completely overwhelmed when you put the two together and try to figure out your lawsuit loan fees and costs. That’s why if you’re thinking about taking out a presettlement lawsuit loan, it’s best to speak to your lawyer first. He or she may be able to direct you toward a funding company that will be able to answer any questions or address any concerns you may have.
The most important thing to ensure while choosing a funding company is 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 best pre settlement 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.
In actuality, obtaining a presettlement loan is pretty straightforward. Once you’ve spoken to your lawyer, you’ll want to zero in on a good lawsuit funding company. At that point, you can fill out a preliminary application. Generally, the information the funding company is 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 obligation simply for filling out an application, and there are no fees applied to do so.
The next step would be for the funding company to reach out to your lawyer in order to obtain a few key details about your lawsuit. Don’t worry, there won’t be a mountain of paperwork your attorney will be expected to deal with. The funding company just needs to be briefed on the facts of your particular case. If your claim is strong, then you will not be denied unless you are in an active bankruptcy or owe child support liens.
No credit checks are performed in order for you to get approved for pre settlement lawsuit funding. And you don’t need a job since there are no recurrent payments made once you receive the funds. The only thing needed to get approved is an evaluation of the merits of your case. And as far as how much your lawsuit loan fees will cost? The best pre settlement funding companies will be able to get you the lowest cost pre settlement funding to suit your needs.
Whether you receive an offer or not will depend on the expected value of your case and risk associated with it. Not every case will be approved; only cases that show clear fault on the defendant and clear injuries to the plaintiff will be approved for pre-settlement funding. Defendants must also have good insurance to ensure someone will pay for the damage they caused to the plaintiff.
Do I really need to involve my lawyer?
Even if you’re just at the consideration phase of obtaining pre-settlement funding, you’ll want to consult with your legal counsel before proceeding with anything regarding your case. In fact, it is not only highly recommended but required that you speak to your lawyer or case manager beforehand. They will be able to help you with the decision if you ask their advice, but they may also discourage you from taking pre-settlement funding on your case.
Your lawyer may not appreciate the dire financial situation you may be in, and how taking even a small advance to pay bills may be a huge relief. Ultimately the choice is yours. In any case, applying for pre-settlement funding will require at least a modicum of assistance from your lawyer. Thankfully, pre settlement lawsuit funding contracts are very transparent and explain exactly what you can expect, but you will still need your lawyer’s assistance—if not necessarily their approval—before moving forward.
Why would I even bother to take out a presettlement loan?
If you are the plaintiff in an active lawsuit, chances are good that you’re looking to receive monetary compensation at the final ruling. But because the legal process can take much longer than you may have anticipated, you now find yourself in unexpected financial straits. That’s where pre-settlement funding comes in.
In fact, the number one reason that people take funding from their pending lawsuit is to pay their bills. One advantage of pre-settlement funding is to allow you to manage your finances while you wait it out through the endless red tape of the court process. Even if you are anticipating a favorable judgement, it could take many, many months before your case is settled, all the while leaving your resources in limbo.
Pre-settlement funding can get you the money you have coming to you without all the unnecessary wait time. A loan against your lawsuit could help you keep up with your accumulating legal fees, keep up with your mortgage or rent payments, medical expenses, credit card bills, college tuition… you could even use the money to take a vacation if you wanted to. The cash advance you obtain from a lawsuit settlement can be used for anything you want; there are no limitations.
If you’d like to ease the stress caused by any outstanding bills or if you’d just like the security of a little extra money in your bank account, pre settlement lawsuit funding may be the right choice for you. Whatever your lawsuit loan fees may cost would be a small price to pay for peace of mind.
Why is that?
Well, consider this: If you were the victim of an injury due to a motor vehicle accident or medical malpractice and have been disabled in any way, there’s a good chance you are unable to work due to your injuries.
Maybe you are able to work but you were dismissed from your job because of discrimination of some sort. Whether racial, gender-based, or age-related, you may feel as though you have been unjustifiably dismissed. Because discrimination is unlawful and cruel, you rightfully filed suit against your former company. But regardless of how you wound up here, the fact remains that you no longer have a weekly paycheck to count on. Pre settlement lawsuit funding is a way to get cash now, without having to wait until your case is concluded… or until you find a new job.
Insurance companies have been known to tie up litigation for years. In the meantime, your ability to work has drastically lessened or ceased altogether. Without a steady income, how are you supposed to survive until your case settles? Pre-settlement funding can help you to not only keep up with your bills but maintain your lifestyle.
Lawsuit funding provides consumers with financial options. Some may be good or some may be costly, but at the end of the day, the decision to proceed is up to the consumer. Pre settlement lawsuit funding is a viable service when utilized correctly.
Obtaining pre-settlement funding 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 a reputable funding company, the time from application to cash-in-hand can be as little as 48 hours.
Probably the greatest advantage to acquiring pre-settlement funding, however, is peace of mind. Worrying over the details of your lawsuit can cause seemingly unending stress. Couple that with financial strain, and it’s enough to instill unfathomable fear as well. A pre settlement lawsuit funding loan can help to lift the burden and offer you room to breathe.
Legal-Bay is one of the best pre settlement funding companies in the industry. We’ve been doing this a long time, and we know what our customers need and expect from us. We’d love to speak with you and show you why. Please feel free to visit our FAQ page or contact us for more information on how you can obtain pre-settlement funding.