Lawsuit loans aren’t actually loans at all, but a cash advance against a pending settlement for personal injury plaintiffs.  Many people who have been injured due to negligence find that during the course of a lawsuit (which can last for months or even longer), their financial situation deteriorates.  Time spent in court, lost wages, the inability to work, medical costs – all of these things can contribute to financial strain.  Litigation funding may be a process you and your attorney want to consider.

How do lawsuit loans work?

First of all, you must qualify.  Qualifying is usually easy, as long as you have a strong, valid claim.  Frivolous claims are not accepted.  If your attorney has taken on your case on a contingency basis and you have suffered injuries that prevent you from working or performing routine tasks, you will likely qualify for litigation funding.

What information must you provide to the funding company?  Your lawyer will gather the necessary documentation, which pertain solely to the nature of your injuries, and the accident or circumstances that caused them.  What you will NOT have to provide is information regarding your employment history/status, credit rating, and other personal info.

How long will it be before you can get your money?  With lawsuit loans, applicants usually get an advance against their pending settlements within 24 hours of approval.  This is the quickest way to get the money you need to pay medical expenses, household bills, attorney fees, and other costs.

How much will your advance be?  In most cases, litigation funding companies are willing to advance approximately 10% of an individual’s potential settlement.  If your lawyer valued your claim at $100,000, you can expect an advance of about $10,000.

With a lawsuit loan there is no out-of-pocket expenses, and you only repay the advance once you have won your case and have access to your money.  What happens if you do not win?  No worries, as litigation funding is non-recourse, which is a fancy term meaning you do not repay the loan if you do not win.  Additionally, you will only pay fees and/or interest if you do win your lawsuit.

If you are involved in a personal injury suit and find that your financial situation is rapidly deteriorating, speak with your attorney about lawsuit loans, and whether this may be something you should consider in order to get on solid financial ground while waiting for your case to complete.

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