Presettlement Lawsuit Funding: How It Works
Whether you have been injured at work, slipped in a supermarket, or have been in a vehicle collision that wasn’t your fault and you are waiting for your settlement payment, but are in a bit of a financial pickle, you might be able to take a loan out against the damages you are owed when the lawsuit is finalized. Sometimes it can take months for a lawsuit to conclude and to receive payment, especially in the instance of a construction accident settlement, because their lawyers might ask for an extension, which can put you in an even bigger financial bind. If you are injured and can’t work – how can you pay for living and medical expenses? Here is how presettlement lawsuit funding works.
First of all, it is important to look at what a presettlement lawsuit is. Usually, people can be approved for fast lawsuit loans if they have a document signed – by the judge – that states that they have won their case. Cases can range from workplace related injuries to getting injured on a public street. In order to actually get approved for the loan, however, you need to not only state that you have won your case, but that you have monetary winnings coming your way too. Just like the nature of the cases can vary, so can the monetary damages. No matter what it is, though, it might take a while before you see a check, which is why a loan is important.
In some cases you might be able to get approved for a loan purely based on the fact that the lender believes you have a good chance of winning your case. This can be an excellent way to get the money you need far in advance – even before the trial date. First, the lender will have its legal team or judicial counsel review your case. Then they will determine the probability of your chances of winning the case. If the probability is highly in your favor you will then be approved for your loan.
Furthermore, like anything, a lawsuit loan has its risks, but unlike other loans a lawsuit loan’s risk rests on the shoulders of the lender, especially if you lose the case. A lender can also lose money in the instance that the person responsible for issuing the payment to the plaintiff files for bankruptcy and dissolves the monetary damages with all his other outstanding loans. Risky for the lender, yes, but it can also be risky for the borrower, especially when it comes to interest rates.
At the end of the day, while these types of loans are incredibly risky for lenders, they make up for it with significant interest rates. The interest rates could be even more steep if the nature of the loan is deemed more risky or if there is a bigger chance of not winning a particular case. Yet, sometimes – especially in the case that you are hard up for cash – taking out a lawsuit loan can be more than worth it – you don’t want to end up losing your home or defaulting on other payments, which could send you even further into debt. If you analyze the circumstances, a lawsuit loan is a pretty good deal.