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What Are Lawsuit Loans?

Posted on: June 18th, 2012 by admin

A lawsuit loan is a cash advance against a pending settlement for plaintiffs involved in a personal injury lawsuit. This allows the plaintiff to have the necessary funds to pay bills, medical expenses, buy groceries and live as he or she normally would while awaiting settlement. Litigation funding companies provide these loans to those whose lawsuit qualifies.

Commonly known as litigation funding, those who are facing a long, drawn-out lawsuit such as a personal injury lawsuit may take months to settle. Often the individual finds themselves in deep water financially. Because of injuries, they may be facing extensive medical costs and reduced income because of their inability to work. In the meantime, you need money to get by, and this is where a lawsuit loan comes in.

Most people with a solid case will be accepted. With lawsuit loans there is no up-front cost or out-of-pocket expenses to worry about. The litigation funding company will review the information submitted by your attorney. The information provided only pertains to your personal injury claim. There are no questions asked about credit standing, previous or current employment, background, etc.

One huge benefit of lawsuit loans is that the applicant will receive his or her money quickly if approved. Another benefit is the fact that these types of loan are no risk, meaning you do not repay the settlement funding company if you do not win your lawsuit. You only repay the loan if you do win, at the time you actually receive your settlement. In addition, if you receive your money in structured settlement payments, you can repay the funding company with those payments, along with a small fee and interest.

Generally most litigation funding companies loan approximately 10% of the expected settlement. For example, if you are expected to be awarded $75,000 in your settlement, you may be advanced $7,500 if approved. While this process is not for every individual, it may be the best solution for you.