If you suffered an injury through the negligence of another party, waiting for settlement of the lawsuit seeking damages takes time. Your lawyer is confident of a successful outcome, but you need money now to pay medical bills and living expenses while waiting for the case to end.
An advance against the settlement to use to meet your current financial challenges is possible by working with one of the companies offering legal funding. As you read through this explanation of how the process of taking a cash advance against a personal injury settlement works, weigh the benefits, and talk it over with your personal injury attorney to determine whether it makes sense for you.
What is legal funding?
Companies offering to advance a percentage of the anticipated settlement or judgment in a lawsuit has different names for it, including:
· Legal funding
· Litigation funding
· Lawsuit loans
· Pre-settlement funding
You submit a simple, online application
that primarily focuses on the personal injury case. Unlike a bank or loan
company that lends money based on your creditworthiness and ability to repay
it, legal funding estimates the value of your claim and the likelihood of a
favorable judgment or settlement.
Funding companies do not look to you for repayment of the money they advance as would a bank. Repayment of the money advanced plus interest or fees charged by the legal funding company happens only if and when there is a settlement or judgment in the lawsuit. If you lose the case, you have no personal obligation to repay the cash advance.
How does the process work?
After it receives an application, a funding company contacts the attorney representing you in the lawsuit to obtain information and documentation about the case for its underwriters to review. The purpose of the review process is to determine the value of the injured party's claim for damages and to evaluate its strengths and weaknesses to predict the likelihood of a favorable settlement.
Legal funding companies advance a portion
of the value of a lawsuit. What you receive depends upon the policy of the
company, as well as its evaluation of the strength of the evidence supporting
your claim. The costs associated with the lawsuit, including legal fees to the
lawyer representing you, affect what a company advances.
How much does legal funding cost?
Funding companies charge higher interest rates than you would pay for a bank loan because of the greater risk of loss associated with cash advances. Each company is free to set its own rate, so compare companies to find the best available interest rate.
Get advice from your lawyer
Legal funding offers a solution to
cash-flow problems while awaiting a settlement of a personal injury lawsuit,
but you should not rush into it. Compare funding companies by getting
information about the costs and terms of the legal funding they offer. Once you
have all of the facts, get advice from your lawyer before applying.
