Pre Settlement Lawsuit Funding
The need for pre settlement lawsuit funding is very keen for anyone who is waiting for a personal injury suit to make its way through the courts. There can be many reasons why a plaintiff in such lawsuits might be running short on cash. In some cases, the injury may have been so serious that it has prevented the plaintiff from returning to work. Without an income, or with a lower than usual amount of money coming in, bills and debts may have begun to mount up. Such financial chaos that is a result of the harm of negligence of another individual or organization can be very stressful and frustrating for the victim. In addition to the obvious problems that can result from going without a source of regular income for an extended period of time, such hardships can have a detrimental impact on the case itself. The need for money might persuade a plaintiff to settle out of court for far less than the case merits. For this reason, legal professionals frequently refer clients to agencies that offer pre settlement lawsuit funding. Having access to these funds can put plaintiffs and their families back on track financially. It can also give the lawyers sufficient time to work out an equitable settlement or to present the plaintiff's case in court. Some of the types of cases that might qualify for this kind of funding could include car accidents, wrongful or accidental death suits, medical malpractice, slips and falls, and a variety of others lawsuits.
The way that a pre settlement lawsuit funding works can be very straight forward. Frequently, a client's legal representation will refer them to agencies that offer this type of funding. Many clients may have concerns over the amount of debt that they may be taking on if they agree to receive funds from one of these agencies, particularity if the client's case is unsuccessful. Hopefully, a legal professional can help the client to understand the level of financial obligation that the client is agreeing to. It is important for a plaintiff to understand that this is not a traditional loan. Such cash advances are called non recourse financing. If the plaintiff's lawsuit is unsuccessful, the plaintiff will owe nothing to the lender. Pay back is generally totally dependent on any award that the client receives as a result of the suit. For this reason, a lender will need to know a good deal of information about the particulars of a case before deciding to make funds available. Any cases that seem to have a limited hope of success will be unlikely to result in a non recourse advance for the plaintiff. If approval is given, the client will receive what amounts to a cash advance that will only be paid back if the client receives a monetary award as a result of the suit. Receiving cash thanks to a pre settlement lawsuit funding agreement does not add to the overall debt of an individual.
The amount of money that will be made available will not exceed a percentage of the predicted final settlement. When handled professionally, a pre settlement lawsuit funding arrangement can make a real difference in the live of clients who are struggling to make ends meet as they wait for the conclusion of their case. Of course, it could be less complicated for the legal professional to simply advance the money to a client and later deduct it from the client's legal bill. Most state bar associations would take a dim view of such financing. Lending money to a client is considered an unethical conflict of interest and a violation of the attorney and client relationship. Any kind of financial aide must come from an independent party. This financing is not, in the traditional sense, a loan. It is viewed as a cash advance or an investment. If a client ends up loosing their case, the client will not be required to pay back the pre settlement lawsuit funding and is entitled to keep any funds that were advanced. Concerns over frivolous lawsuits may also come into play in some situations. Some legal professionals fear that plaintiffs will simply drum up excuses to take individuals or organizations to court just to obtain access to cash advances that do not need to be paid back. Of course, providers of this funding do not offer these funds lightly. If there is not a reasonable chance for profit, no advance will be made.
Generally, firms that offer pre settlement lawsuit funding will not loan more money than a client can expect to collect if they are successful in court. There will be a certain amount of paperwork that will be collected by the lending agency up front. This paperwork could include medical records, police reports, the plaintiff's complaint, copies of medical bills, and the defendant's answer. Financing agencies will evaluate each case according to this information and decide whether or not there is a reasonable chance of success. The Bible tells believers to trust and hope in God. "Blessed is the man that trusteth in the Lord, and whose hope the Lord is." (Jeremiah 17:7)
In many cases, traditional lending sources will not be available to many plaintiffs. This is especially true if the client is out of work, or is deeply in debt. This can mean that pre settlement lawsuit funding is the only option that is available. Many organizations who offer such opportunities will meet with clients up front in a free consultation. While many clients do not need to pursue financing of this nature, if needed, these advances can make a big difference in the eventual outcome of the court case.
Pre Settlement FundingPre settlement funding provides quick cash for people with established court cases. Basically, they are classified as a non-recourse cash advance. Funds are distributed only to people with pending lawsuits to help them meet financial obligations until the case is settled in court and cash from the settlement starts coming in. Finance companies will make cash advances based on lawsuits of just about any sort: slip and fall, product liability, motor vehicle accident, construction accidents, medical malpractice, false imprisonment, and commercial litigation. Pre settlement funding is low risk for the plaintiff, but may not be all that easy to obtain.
Non-recourse means that the person receiving the cash advance is not required to repay the money, if the case is not won. If the case is won, and the settlement or award is less than anticipated, adjustments are made to the amount taken directly from the settlement. Although the funding may be difficult to obtain, the actual process is really quite simple. If a person wins their case, the amount of the advance along with fees are paid directly to the finance company out of the settlement, judgment, or award. But, if a person doesn't win in court, he or she doesn't pay. That's the catch. It's unlikely that a finance company will be willing to advance cash to a plaintiff with a weak case.
In order to obtain pre settlement funding, a person must be a plaintiff and he or she must be represented by an attorney. After the initial paperwork is submitted, a finance company will contact the attorney. Sometimes an attorney may recommend that the plaintiff seek hardship funding to keep afloat while the case works through the legal system. The attorney and the financial institution will discuss the case and the probability of victory. An estimate the value of the settlement or award is also discussed. If the financial provider determines that the case can be won, funds will usually be distributed to the plaintiff within twenty-four to forty-eight hours. Occasionally pre settlement funding will be referred to as loans. But, these types of financial transactions are not legally classified as loans. Credit is not extended to the plaintiff and the business transaction will not go on a person's credit report. In a sense, the finance company is speculating on the outcome of the court case. Juries can be unpredictable. It's not uncommon for strong cases to be lost. As a result, lawsuit funding is considered high risk for the financial institution, so the transaction fees can be significant. Basically, the charge may be a either a single flat fee or a monthly fee.
The finance company may charge a fee each month the pre settlement funding is outstanding. This type of fee may not be the best way to go because some court cases can take years to settle. Monthly fees accrue and are taken from the settlement or award. Finance companies may charge the fee each month beginning when the funds are issued and continue until the money is finally recouped. And, fees may be as high as 15 percent per month. As a result, once the case is settled the fees can be quite significant. All cases vary, and the amount of money a person may be advanced will vary as well. Advances generally range anywhere from under $1,000 going up to $75,000. But some finance companies will advance up to $100,000 under certain circumstances. Keep in mind, lawsuit funding may seem to be a good choice during times of hardship. Some accidents prevent a person from working at all. Other times he or she may be able to work less hours, so income is significantly reduced. Funding can help pay health-care expenses. But, investigate and gain wisdom because there may be better opportunities. Quick funds may turn out to be folly and not as desirable in the long run as they first appear. If nothing else, a little knowledge will save money. "Happy is the man that findeth wisdom, and the man that getteth understanding. For the merchandise of it is better than the merchandise of silver, and the gain thereof than fine gold. She is more precious than rubies: and all the things thou canst desire are not to be compared unto her." (Proverbs 3:13-15)
Understandably, many legal experts believe pre settlement funding should be considered a last resort. Take a long close look at the hardship and determine if this course of action is desirable. Other funding options should be sought first. Financial and legal experts suggest that a person should shop around first before deciding on this type of funding. If a person does decide to pursue settlement funds, they should investigate several companies. There is basically one reason that pre settlement funding is a non-recourse cash advance and not classified as a loan. Most states have adopted usury laws to prevent lenders from charging exorbitant interest rates and fees. So, calling them loans would prevent the finance company from charging the fees required to offset the risks. Basically, under usury laws, if the interest rate exceeds a set percentage for certain types of loans, then it is considered to be an illegal contract and cannot be enforced. For the most part, pre settlement funding is also referred to as a cash advance, investment, or venture capital. According to an online legal website, financial groups can get around the usury laws because the contract is set up so the person being provided the funds does not repay the amount received. He or she will pay only a portion of any settlement received.