Facing a lawsuit can be a daunting situation. Waiting on a final outcome can be stressful. And if your lawsuit is for a personal injury, you may be dealing with lessened or terminated income while being out of work due to your personal injuries.
You probably found yourself here because your lawsuit is taking a long time to see its day in court. You’re most likely expecting a sizeable settlement at the end of it, but the problem is that the finish line keeps getting pushed back. That’s why it may be time to consider a cash advance against your lawsuit.
Even if you have a rock-solid case and a talented lawyer, a lawsuit advance can be a viable resource for plaintiffs struggling to make ends meet as they wait for their litigation to be resolved, and has proven to be a valuable financial solution for both attorneys and their clients in recent years.
If you’ve decided to research ways to obtain a lawsuit advance on your settlement money, you might have some questions about the process. Like:
Just exactly what is a lawsuit advance?
Basically, a lawsuit advance is a way to get cash from your anticipated settlement now, without having to wait for the conclusion of your trial.
If you are the plaintiff in a lawsuit seeking monetary damages, you may have stumbled upon the term “legal funding.” While a lawsuit advance could mean a way to help pay legal fees (more on that later), in most instances, legal funding is actually a pre-trial cash advance against your lawsuit settlement.
What that means is that you don’t need to wait for your case to conclude before you can receive a portion of your anticipated settlement. In fact, most reputable lawsuit loan companies will be able to get your cash in hand in less than 48 hours.
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 in actuality, a lawsuit advance isn’t a loan at all.
The reason why is because you don’t have to pay back the funds if you lose your case. No monthly payments; no interest fees. With a loan, the borrower has to have collateral and credit, and be prepared to incur fees and interest charges. Since a lawsuit 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, which is why legal funding is a no-risk proposition for the consumer.
Why would I take out a lawsuit advance?
With a stack of bills piling up and little to no revenue trickling in, you might find yourself on the brink of foreclosure or eviction. You may find yourself in the position of having to keep up with your financial obligations and legal fees, all the while waiting out the many months—or even years—until your case settles. With massive unemployment due to the current coronavirus pandemic, your finances are being stretched even thinner. It’s not easy to navigate a personal financial shortfall, but when dealing with a national economic collapse, the stresses are even more amplified.
While friends and family would love to contribute, they may not have the available funds to do so. This is where a lawsuit advance can really help you out. Wouldn’t it be great to get your hands on your settlement money now instead of waiting for the courts to finally hear your case? With an uncertain timeline, who knows how long it will be before your case is finally settled? The right lawsuit loan company can help you obtain a lawsuit advance in a matter of days. Not years.
Is that what a lawsuit loan company does?
Yes. A lawsuit loan company can advance you a portion of your expected settlement amount in the fastest amount of time possible. You only pay them back if and when you win your case, whenever that may be. If you lose, you don’t need to repay the lawsuit advance.
It may sound too good to be true, but if you do your research, you’ll find out for yourself. Keep in mind, however, that no two lawsuit loan companies are the same. In other words, some are more or less reputable than others.
How do I find a lawsuit loan company?
If you’re looking to obtain a lawsuit advance, 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 reputable lawsuit loan company, one that will be able to expedite your approval process. If your lawyer can’t recommend a funding company, it may be time to take matters into your own hands.
A simple internet search is a good way to get started. It will be best to 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 a lawsuit loan company that will be a good match.
The most important thing in picking a lawsuit loan 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. Most reputable funding companies want you to get a fair deal; those are the ones you want to work with.
It is not uncommon to see advertisements on TV, billboards, and benches promoting lawsuit loan companies. Promising plaintiffs “fast and easy cash,” such advertisements can lure plaintiffs to call these companies, apply for the lawsuit advance, and sign the contract without knowing more about the strings that are attached to the claims.
Granted, lawsuit loan funding companies are businesses. They have to make money from these loans, which means plaintiffs most likely will be paying back the principal and interest (whether compounded or simple) and any other included fees. However, you’ll want to make sure you don’t get blinded by some flashy ad and end up paying more than necessary.
That’s not to say that every lawsuit loan funding company who runs an ad is shady. It just goes to show that plaintiffs need to be sure not to get lured into what is being advertised without knowing what strings come with it.
But I’ll still have to pay the lawsuit loan company something for their services, right?
Every lawsuit loan company is different, but no, 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.
Some aggressive lawsuit loan companies charge an application fee, an origination fee, or some other kind of exorbitant processing fee which can cost hundreds of dollars, and if they go through a broker (as opposed to being a direct funder themselves), the added costs can be staggering. Your lawsuit advance application should be reviewed for free, and any payback terms should be lain out clearly in your contract before you sign.
It is important for a consumer to speak to a reputable lawsuit loan company that has fair rates to ensure that when it comes time to settle your case, your funding company doesn’t take the lion’s share of the settlement.
In addition, a lawsuit advance contract offers a previously determined payback amount. No interest or surprise fees. Some lawsuit loan 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 funding firm so that you don’t get hit with unexpected charges.
Should I get my attorney involved?
Absolutely. You should never sign a contract without guidance from your lawyer. You’ll want to make sure he or she reviews every word and can give you his or her professional legal advice. You need to know what you’re getting into and what legal options you have should there be a contract dispute.
In some states, lawsuit loan companies can dodge the usury and fair-lending laws traditional banking institutions have to abide by. For some, this may mean that the lawsuit loan company isn’t required to cap their interest rates for a lawsuit advance. Yes, a lawsuit loan company may argue that their reason for charging such a high rate comes down to a lessened guarantee of being paid back. But if you’re dealing with a reputable lawsuit loan company, there will be no hidden interest rates or fees in the fine print.
If you’re not sure, you can bring any questions about your lawsuit advance contract to your lawyer. Any lawsuit loan company that tells you otherwise should send up a red flag. Worst case scenario, the lawsuit loan funding company is hiding something in the contract that gives them a better deal. But even in the best-case scenario, such missteps show that they simply don’t have the experience necessary to do right by you.
Okay, got it. So how do I go about getting a lawsuit advance?
The approval process for a lawsuit advance is pretty straightforward and easier than you might think.
- The first step will be to fill out a preliminary application with the lawsuit loan 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.
- Once the application has been completed, the lawsuit loan 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.
Let’s discuss what was mentioned before about how “a lawsuit advance can pay for itself.”
Battling a lawsuit is a time-consuming process. While awaiting a resolution to their case, plaintiffs may be financially strapped for basic needs such as food, rent, or medication. When plaintiffs stand to gain significant settlements, the defendants may drag a case out in hopes that the plaintiff will settle for less. Nothing is more disheartening to an attorney than watching a client being forced to accept a lowball settlement because they can’t afford to let the legal process run its full course.
A lawsuit advance can give an attorney the time he or she needs to press for the settlement their clients deserve, and to devote their time and resources to the actual lawsuit by empowering clients to better handle their financial issues on their own. A lawsuit advance allows lawyers the freedom to practice law… instead of playing financial advisor.
Basically, a lawsuit advance allows the plaintiff to hold out for a much larger settlement down the line. In most cases, the settlement amount of a successful lawsuit is enough to repay not only the lawsuit advance but any fees associated with your lawsuit. It’s a great way to give yourself a head start on rebuilding your life.
The bottom line is that lawsuit advances help plaintiffs solve their financial problems, allowing them to wait out the many, many months until their lawsuit sees the inside of a courtroom. It also allows plaintiffs to hold out for the largest settlement possible. Just because most court cases can take a long time to settle doesn’t mean that you should have to wait to get paid. Legal funding exists for this very reason. Rather than wait out the many months for a final ruling on your case, you could get a cash advance within days.
As Legal-Bay is one of the best lawsuit loan funding companies in the industry, we have over twenty years’ worth of knowledge to share with you, and some of the lowest rates in the business. 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 answer any questions you may have. Please feel free to contact us for more information on how you can obtain a lawsuit advance.