What's a "Lawsuit Loan" All About?
"Lawsuit loan" is a misleading term because it's not a loan in the classic sense. A lawsuit cash advance would better describe the process. Sometimes referred to as pre-settlement lawsuit funding, this type of financing is based more on the chance of you winning your suit. It is a cash advance to you from a company that feels you have a great chance of winning your lawsuit and they are willing to make an "investment" in you in the form of a pre-settlement cash advance. They will advance you a percentage of what they feel you will actually receive at the time of settlement.
Often, a person can't get a line of credit on their home during the litigation process because they've started getting behind on bills or the lender doesn't lend to someone with a pending lawsuit. The major difference in a lawsuit cash advance and other loans is you don't have to repay the money if you don't win your case. It's what is known as non-recourse lawsuit funding.
The pre-settlement cash advance is really the loan of last resort when you consider the high risk and accompanying high rate of re-payment to the lender. Because the loans are typically termed as no win, no pay, no risk loans, the fees can seem usurious when in reality, you have to consider that the lenders of these types of loans in more in line with high risk venture capitalists.
Should I Apply for a Lawsuit Loan?
While no one but you can make the final decision whether to pursue pre-settlement funding, you can certainly look at the pro's and con's of it. If you are under a lot of stress because finances are short and the bill collectors keep calling, you might consider that a reason for it. You don't want to wait until it's too late to salvage your mortgage or other important loans before making the decision. Maybe you want the lawsuit loan because you can't borrow the money anywhere else. The only major thing against applying for a pre-settlement cash advance is the repayment terms.
Is This a Cash Advance From My Lawyer?
Lawyers and attorney firms are prohibited from making cash advances to their clients because it could be construed as a conflict of interest. Let's face it, if your lawyer is supposed to be looking out for your best interest and at the same time is trying to collect past due funds from you, that would be somewhat disturbing. The act of your lawyer taking your case on a percentage isn't the same as advancing cash against your settlement funds.
Where Do I Get Lawsuit Pre-Settlement Funding?
There are many sources for lawsuit loan funding and it can be quite confusing to the average person. When you are under the stress of trying to catch up on past due bills and dealing with bill collectors, you might not be able to make the best decision concerning a lawsuit loan. Different pre-settlement funding companies fund different types of lawsuits and you can waste a lot to time just trying to chase down a lender for your type of lawsuit. Next, you have to compare the fees and repayment costs of each lawsuit cash advance company. It can be very confusing. Many people have found the services of a lawsuit loan broker to be a godsend at this time in their lives.
What is a Lawsuit Loan Broker?
Lawsuit loan brokers are very well versed on the different types of cash advances that each company is willing to lend. They also can quickly resubmit your application to another pre-settlement funding company if you are turned down for some reason. The broker is looking out for your benefit and is another source of help if you have a problem during the process. Allowing a lawsuit cash advance broker to assist you can be one of your best decisions during your lawsuit.