How Lawsuit Loans Work
Lawsuit funding is a service that provides a plaintiff with an advance portion of their anticipated lawsuit settlement. The service is designed to alleviate immediate financial burdens and obligations that will simply not wait the months to years that a lawsuit may take to settle. An injury victim has enough to worry about without the added trauma of worrying about how to pay for existing financial obligations and needs. The funds also give the plaintiff the financial ability to wait out commonplace stalling tactics that often cause victims to prematurely settle for an unfair amount.
How Lawsuit Funding Works
Lawsuit funding goes by many names - lawsuit loan, pre-settlement funding, pre-settlement loan, lawsuit cash advance, etc.. The many terms may lead to some confusion, and the term "loan" may lead to some misconception.
Lawsuit funding isn't actually a loan. First of all, when someone goes to a bank lender for a loan, the lender will generally require the applicant to have existing assets to use as collateral for the loan. Lawsuit funding essentially "collateralizes" the lawsuit. In other words, the applicant doesn't need to put up their home or possessions as collateral. The perceived value of the lawsuit is what will be used as the collateral. Secondly, traditional lender loans require the loan amount to be repaid in full. The pre-settlement advance from lawsuit funding is only repaid if the lawsuit ends successfully. If successful, the plaintiff will repay the advance and a preset fee.
The Procedure For Lawsuit Funding
Step 1
The lawsuit funding application should be completed. The lawsuit plaintiff can complete a short online application with their personal information, lawyer information, and case description or call the lawsuit funding company directly.
Step 2
An "Authorization for Release of Information" should be signed and dated by the applicant. This form will then need to be faxed or otherwise submitted to the lawsuit funding company.
Step 3
The Authorization for Release of Information form allows the applicants' attorney to release records to the lawsuit funding company. The lawsuit funding company will use the form to request documentation from the attorney by fax or email.
Step 4
Once the lawsuit funding company receives the requested documentation, they will review the documentation, evaluate expected recovery amount and time to recover, and assess risk. This process generally takes about 24 hours.
Step 5
If the applicant is approved, he/she will be called with an offer for lawsuit funding. At this time, the applicant will learn how much money can be advanced and the fee amount.
Step 6
The applicant will execute the contract.
Step 7
The agreed upon funds will be delivered to applicant.
It's hard to believe, but this entire procedure can be completed in just 24 to 48 hours.
Recent News
- Cashing Out a Structured Settlement Annuity
- Postal Workers Most at Risk of Dog Bites
- Salmonella Risks Leads to Pet Food Recall
- Underreporting of Hospital Errors is Common
- How to Find the Right Structured Settlement Broker
Frequently Asked Questions
- 10 Steps involved in selling your structured settlement.
- Can a lawsuit loan really make my case stronger?
- Will the national pension elimination make structured settlements disappear too?
- Why can't my attorney give me a lawsuit loan?
- Only sell structured settlements to litigation funding providers you trust.
