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If you’re lucky, you’ve only ever idly asked “what next?” at the end of a film or book when a windfall or victory happens for the protagonist. If you’ve experienced that in real life, you know that the ‘next’ is a directionless, frustrating amount of waiting.
Even after winning a settlement in a court case, you don’t exactly get cut a check as you leave. Worse, you may be certain of victory in court but need money like yesterday to cover medical and legal costs. For both of these scenarios, there is a solution in the form of a lawsuit settlement loan.
This special type of funding has some strings and isn’t always the best choice but it is an option. Read on to learn more.
Lawsuit Settlement Loan Specifics
This type of funding comes by several different names. You’ll encounter labels such as advanced funding, litigation financing, and settlement funding.
The lack of the word ‘loan’ in any of these labels doesn’t change what you’re getting. These funds are contingent on repayment. The repayment itself is attached to the likely event of future funds coming through at the end of a court case.
In some instances, the term lawsuit settlement loan is attached to a type of summary judgment loan. The difference is that those come after a settlement agreement has been signed and the case is over. These are often single payments distributed to you by an agency that receives monthly or annual payments.
The amount offered for a lawsuit settlement loan depends highly on the type of case and the likelihood of a court victory. Pre-settlement lawsuit loans cover legal costs and some medical bills and offer a portion of the eventual money.
Check out this post for a rundown of the average settlement amount and timetable on an auto accident.
Lawsuit Settlement Loan Requirements
To be eligible for a settlement loan you need to meet requirements like any other loan. This is a massive gray area.
In some instances, filing a case and securing representation by a lawyer is enough to get approval. In other instances, a high degree of liability needs to be established against the defendant in the case.
These are loans and they need to be paid back. They are also emergency loans so they come with some hefty interest rates.
If the court case does not end in your favor, repayment is still required.
Lawsuit Settlement Loan Caution
Like any situation in life, making a smart decision about a lawsuit settlement loan is about weighing options. If you need money now to fight for a settlement, they offer a lifeline that otherwise wouldn’t exist.
For some, the risk is simply too high. Some law firms will cover costs of the courts and filing fees under contingency that they will get a bigger share of a settlement, which either engenders trust or comes across as a loan by a different name.
Go over the interest rates, the timeline of the case, and be smart about the worst case. Don’t let promises of big checks down the road convince you.
It’s always important to get as much information as you can, which is why you should check back here for more news and information.