What Is lawsuit funding? Is It For You?
Following an injury that was not their fault, many people seek advice on what compensation is open to them. Usually, there are two types of recourse. A plaintiff can claim from the other party’s insurance, or they can consult a personal injury attorney and seek compensation, commonly known as damages, by suing. The type of damages available depends on the level of physical, emotional, and/or financial losses arising from the accident. Also considered are any bills which are incurred due to medical or dental treatment.
Examples of common personal injury cases can include, but are not limited to:
– Car accidents
– Medical malpractice
– Injury at a venue such as a slip and fall at a supermarket
– An injury at work
– Animal attack injuries
If you have been injured and it wasn’t your fault, but you’re not sure if it qualifies as a personal injury case, you should speak to a personal injury lawyer who can advise you on the legal technicalities of your specific case.
The process of completing such a lawsuit can be costly and long-winded. While there is the potential for a settlement to cover medical and other expenses, the pay-out might arrive well after those expenses have fallen due. As a result, some people avail of a ‘personal injury lawsuit loan’ or ‘personal injury funding’ to cover the costs arising in the meantime.
How to Get Funding for Your Legal Case
Sometimes opting for pre-settlement funding can relieve a lot of financial stress while you wait for your settlement to come through. Often, providers will ask some pre-settlement loan questions, which will influence the funding available to you. In addition, these questionnaires will want to know about you and your case. This allows the provider to assess how likely it is that you will win your case.
Once the provider calculates that you have a good chance of winning your case and that there is a high potential value of the settlement, they will begin transferring you the money. This can be done through a number of methods, including cash, check, or bank transfer. The benefit of this process is that it’s simpler than traditional loan applications and the funding is likely to reach you within as little as 24 hours.
What Lawsuit Funding Can Be Used For
Now that you have your funding, you can use it for almost anything. If you have any urgent expenses, it’s probably best to pay those first. The great thing is that you can also use your funding to cover everyday costs such as rent, gas, and bills. It’s important to note there are some things you can’t use your financing on; namely, you can’t use it to pay your legal fees.
The availability of this money should alleviate some of the stress that occurs if you can’t work due to your injuries or upfront expenses related to your care. Sometimes, this can be one of the most stressful periods following a personal injury. Having a cushion in the form of pre-settlement funding will allow you to focus on more important aspects like getting better!
Paying Back Your Personal Injury Litigation Funding
There are two ways you can pay back these types of loans. First, if you took out a presettlement loan, you might have to pay it back in monthly installments. This is good if you wouldn’t like to pay back the loan all in one go from your settlement money. Alternatively, you can opt to pay back the money in one lump sum from your settlement. The repayment method will depend on your contract with the provider, so it’s essential to check your agreement before signing.
The main things to look out for will be the repayment method, charges for late or missed payments, the percentage of interest, and any other miscellaneous charges. You should note your monthly/final payments and anything that you don’t understand and speak to your provider about them before you sign your contract and accept any funding.
The litigation funding company you choose should provide you with complete transparency concerning your contract. Written on the agreement should be the total amount you will receive, a breakdown of any and all fees, detailed explanations about the total amount repayable every six months to a year, and any minimum payment amounts. Additionally, you should be made aware of any right to cancel your contract in the days after your agreement. If you don’t receive this information, always call your provider and ask.
What if I Lose My Case?
Losing the lawsuit may be a common concern for a lot of people thinking about presettlement funding. While traditional loans have to be paid back no matter the outcome, presettlement financing differs. Often, they are advertised as “nonrecourse transactions”. This means that if you lose your case, you will not have to pay back the loan. However, some providers may not operate on this basis, so it’s essential to check.
On the other hand, you may win your case, and the settlement received is lower than what you anticipated and, as a result, is not enough to cover the funding taken. Sometimes, providers will take what’s left after all your other expenses have been deducted. But, again, this depends on the contract with your provider. There have been cases where nothing is left after the costs have been paid. Therefore, it’s important to ask your provider what happens in such a case.
Common Misconceptions About Pre-Settlement Loans and Funding
In the past, many said that pre-settlement funding was unfairly focused on vulnerable people in stressful situations. Another misconception is that there are high fees and costs associated with this type of funding. As with any kind of loan or funding, it’s always best practice to shop around for the best provider for your needs. Make a note of the costs related to each provider, and don’t be afraid to ask questions relating to charges and interest rates. Once you’ve researched the various providers, this will give you a fuller picture of what kind of rates and funding is available to you.
As a result of these misconceptions, some states have outright banned pre-settlement borrowing. Other states have mandated that the lender is registered. Finally, some states require that the providers are registered as lenders and follow lending laws that apply to standard creditors.
To battle these misconceptions, some lenders in unregulated states have voluntarily displayed a commitment to best practices. These have included increased transparency and adherence to honest communications. These steps should help alleviate some concerns consumers have when approaching institutions that provide such services.
Is Pre-settlement Funding Right for Me?
While this type of borrowing may sound like a no-brainer, it’s always good to consider if you really need it. Experts have outlined that plaintiffs going through lawsuits should always consider other types of funding before pre-settlement products. This is mainly because pre-settlement funding or loans can be more expensive than traditional borrowing. Firstly, think of how urgent the need for the money is. If any of your bills can be deferred or put on hold, this would help reduce the amount you need to borrow. For some expenses like rent and household bills, this might not work. You might want to explore your options with traditional providers in the form of a loan that can be paid back at a better interest rate.
Perhaps asking family or friends for a loan is more suitable if borrowing from a standard lender is out of the question. Loan brokers may also be particularly helpful in advising of other loans available to you.
Sometimes, it’s impossible to get other types of funding, and presettlement borrowing is the only option. But, once you’re equipped with the correct information and the right questions to ask, litigation funding could be the perfect solution for you.
How Litigation Funding, LLC Can Help
When preparing to apply for a litigation cash advance, it’s crucial to be informed about the process and your commitments. Receiving funding in Michigan does not have to be complicated and definitely does not need to take a lot of time. Call Litigation Funding, LLC today for a free consultation. You can also send us a message or call us at (248) 353-8830. Our firm will beat any quoted rate and prides itself as the cheapest litigation funding company in Michigan.