Maybe you were shopping at the supermarket when out of nowhere, you found yourself laid flat-out on a wet floor. Maybe you were injured at work. Maybe you were the victim of a botched surgery, or in a motor vehicle accident, or any number of incidents where you have suffered pain and injury through no fault of your own.
Whatever your reasoning, you’ve made the decision to file suit against a company or entity that has caused you harm in some way. Whether you were injured on the job or through a medical procedure, terminated from employment due to discrimination, or intentionally abused by another party, you have chosen to take your grievance to the courts. In the meantime, you may be unable to work. Not only will you not be earning a paycheck, you now have mounting medical and / or legal bills that are difficult to pay on time. The legal process can be lengthy and expensive, and the time it takes to receive your cash settlement can seem daunting.
Some people choose to research how they might take a loan on their lawsuit (also known as a lawsuit cash advance) as a way to receive money prior to the resolution of their case. This can be a helpful option for any plaintiffs dealing with financial strain, and a great source of income over the many months it takes for a case to make it to trial. Borrowing against your settlement can help you stay afloat financially and empower you to hold out until the end of your trial so that your lawyer can get you the best possible settlement amount.
While you may be searching for ways to obtain a loan on my lawsuit or lawsuit loans, chances are good that what you are really looking for is a settlement loan. So, maybe we should address the correct terminology before proceeding. The following is a short glossary of terms for you to know:
A settlement loan (also known as a presettlement loan or pre-trial cash settlement) is a cash advance against the monetary compensation one can expect to receive at the end of a trial. The reason why it isn’t necessarily a loan on your lawsuit is because there is no recourse from the funding company if your case ultimately fails. So, unlike a bank, a settlement loan is a no-risk proposition for the consumer.
If you’d like information on just exactly what a settlement loan is, you can read our article on the subject here.
A lawsuit funding company acts as your liaison between you and your early cash settlement. They will be able to look into your case and tell you how much of a settlement loan you can take on your lawsuit. Filling out an application with a good funding company will be the first step toward receiving cash now, as opposed to waiting until the trial has concluded and a ruling has been passed down.
You can read more about finding a good funding company and the process of applying for a settlement loan on your lawsuit here.
This is a vital phrase that you should make yourself familiar with while researching any type of loan. More importantly, you should know that a settlement loan on your lawsuit isn’t like a bank loan at all, and a much better option for a way to obtain some much-needed cash. The reason why is because a presettlement loan on your lawsuit is non-recourse. Non-recourse means you don’t have to pay back the lawsuit money even if you lose your case. No monthly payments; no interest fees. No credit checks; no collateral. Bank loans don’t offer such ease of approval, and they are certainly not non-recourse.
If you’d like a more in-depth analysis about the differences between these types of loans, you can check out the pros and cons here.
So, now that you’re familiar with what it is you’re actually looking for, let’s see if you’re a good candidate for approval of a presettlement loan on your lawsuit.
- Find yourself falling behind on your mortgage, rent, cable, or utilities?
- Want some extra cash now without having to wait?
- Need a monetary influx to pay outstanding legal, medical, or personal bills?
- Want money to take a vacation, open a new business, or pay school tuition?
A settlement loan on your lawsuit will allow you to:
- Get caught up on your bills
- Enable you to survive financially over the many months leading up to trial so that you can hold out for a larger settlement
- Relieve the financial burden you’ve incurred because of events surrounding your lawsuit (Legal fees, lessened employment, and / or personal expenses)
- Rid yourself of some of the stress you may have been feeling since filing suit
Now that you’ve made the decision to pursue a loan on your lawsuit, you may be asking yourself how to go about obtaining one. Well, it’s not as difficult as you might think.
Step 1: Speak to your lawyer. He or she will be able to advise you on the pros and cons of taking a presettlement loan on your lawsuit. You will need your lawyer’s cooperation in order to proceed. It’s important that you do your research to make sure you are fully aware of the terms and conditions of your potential funding arrangement, and your lawyer will help you to understand the ins and outs.
Step 2: Now it’s time to choose a funding company. There are many of them out there, and you’ll want to make sure you’re dealing with a reputable one. Unfortunately, there doesn’t seem to be too much information readily available through mainstream outlets, resulting in distorted facts and assumptions when it comes to funders. This can leave unsuspecting plaintiffs vulnerable to predatory lending practices. Your lawyer may be able to suggest a good funding company, but you can also do some research on your own. For the best way to go about it, you can read an extensive article on the subject here.
Step 3: After you’ve spoken to your lawyer and chosen a funding company, you’ll want to get the ball rolling on your presettlement loan process by filling out an application. The application should be brief, and more importantly, free. There should absolutely not be any upfront fees. After your lawyer submits the necessary paperwork, the funding company will do some minor research to find out if your case has merit.
Merit will be the defining factor to determine whether or not you will be able to obtain a loan on your lawsuit. Which brings us to a new glossary term to add to your vocabulary:
Merit is decided based on three factors:
- Liability – Who is responsible for the hurt caused to the plaintiff?
(A doctor? Another driver on the road? A negligent store owner?)
- Damages – How much harm was caused?
(How injured are you? How has this incident affected your life?)
- Insurance – Does the responsible party have the financial means to compensate the injured party?
(Is there a source of available money with which to reward the plaintiff?)
Basically, the offered amount of the loan on your lawsuit will be based on the expected value of your case and risk associated with it. Severe injuries, clear cut discrimination, and blatant medical malpractice will of course be eligible for larger compensation than a minor lawsuit might be. If the funding company decides your case has a high probability for settling at an amount which they feel is enough to repay their loan, they will contact you and arrange to give you the money.
Not every case will be approved; only cases that have clear fault on the defendant and clear damages to the plaintiff will be accepted. Defendants must also have good insurance to ensure someone will pay for the harm they caused to the plaintiff. Most funding companies won’t make a loan unless they are assured they will get their money back.
Reimbursement 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 loan funder will give you a more comprehensive idea of any costs.
The good news is that whether you like the terms or not, lawsuit settlement funding contracts are very transparent and explain exactly what you will owe when your case settles. At that time, your lawyer will directly pay the funding company any amount owed on your contract. And if you lose your case, you’ll owe the funding company nothing.
Once the lawsuit funding company determines there is merit to your case, you will very likely be approved for a presettlement loan on your lawsuit and a cash advance can be obtained within days.
It’s easy to know if you qualify for a loan on your lawsuit against your pending case. If you’ve suffered any damages and have already hired an attorney, your odds of qualifying are very good. Remember, your credit rating or financial history have no bearing on the approval process. The facts of your case are all that matter.
So, to get back to the original question of whether you can obtain a presettlement loan on your lawsuit, the long answer is above. The simple answer, however, is that the merits of your case will be the sole factor to determine if you will be approved.
Some additional tips if you’re thinking about applying for a loan on your lawsuit:
- Research multiple funding companies to find the lowest interest rate while paying close attention to possible hidden administrative fees. Be sure you understand what the compounding interest will be and how you can compute it yourself. Make sure you know exactly how much the loan will ultimately cost you when your case finally settles.
- Don’t use loan brokers. They charge higher fees. Deal directly with a reputable funding company. If you’re not sure if you’re dealing with a direct funder or a broker, ask the company if they are handling the loan on your lawsuit directly… or if they’re referring you to a loan company.
- If you’d like to better your chances of getting approved, your best course of action is to be completely honest about your lawsuit. There’s no need to exaggerate your claims or falsify information.
- Don’t sign any contracts or loan agreements until your attorney has had a chance to review them for you.
- Listen to your attorney. He or she is looking out for your best interests, but remember that the decision to pursue a loan against your lawsuit is ultimately up to you.
Since knowing the exact date your court case will settle is an impossibility, a loan against your lawsuit can be a great way to get the cash you have coming to you without having to wait.
Legal-Bay will be happy to help you figure it out. If you’d like to reach out, we have an entire team of very skilled, very dedicated employees who will be able to offer all the details and answer any questions you may have. We offer presettlement funding loans on lawsuits of all different types. And because the loans are non-recourse, you really have nothing to lose. Your presettlement loan is only paid back once your case settles, so there is little to no risk involved.
If you’d like to know more about lawsuit funding or about settlement loans, you can visit our FAQ page, and feel free to contact us for more information on how you can obtain a non-recourse cash advance loan on your lawsuit.