In a country rather famous for being litigious, it should not come as much of a surprise that there is something available to plaintiffs called a lawsuit pre-settlement loan.
In most instances where a lawsuit is going to take a long time to settle, the plaintiff may find themselves in a real bind financially. Whether the suit involves injuries sustained in a car crash, a slip and fall case, from a defective product, an on the job injury, or as the result of medical malpractice, waiting for a resolution may be a painfully long and drawn out affair. In the meantime, how does the plaintiff pay their bills and get on with life as they now know it?
Some people may well have access to the resources that would keep them stable until a verdict is delivered in their case. Not everyone is that fortunate however. For those who have a meritorious lawsuit, the plaintiff may be dealing with a waiting time of months or years. Yes, years and this will definitely put a crimp in your ability to pay bills, as you may not be able to work any longer. Your accident may have turned the whole family structure upside down if you were the sole breadwinner and are now unable to hold a job. How will the bills get paid, and who will pay them?
These are good questions, and questions that nightmares are made of when plaintiffs are waiting for their cases to wind their way through the court system. While they may despair when thinking of how to handle their finances, there is a solution that may suit them to a T; a lawsuit pre-settlement loan.
Here is how a lawsuit pre-settlement loan works. It’s fairly simple. A company buys an interest in a pending meritorious lawsuit by giving cash loans to the plaintiff. This loan, plus fees and interest, is then paid back “if” the plaintiff wins their case. While this sounds simple on first blush, you should know that not every plaintiff that may apply for this type of funding is approved. This is due to the fact that lawsuit settlement loans are regarded as non-recourse funding.
Non-recourse funding mean if you lose your case and the judgment is in favor of the defendant, you are not obligated to pay the loan back to the company that lent it to you. Yes, you read that correctly. If you lose your case, you don’t have to pay the money back. You can see why a lawsuit settlement loan provider would make sure they don’t take frivolous cases.
Keep in mind that if you do win your case and are required to pay back the loan, plus fees and interest, you will be looking at a fairly high fee. This is because the loan provider is taking on a significant risk and their fees would reflect this. The fees do vary and its best you discuss that matter with the company you choose to approach. There are other facts and figures you would need to know before making a decision that lawsuit funding would be the right thing for you.