A Settlement Funding Company Can Help You Finance Your Litigation
A lawsuit can be a long lasting and therefore costly endeavor. If you got injured during a car accident or became a victim of medical malpractice, you might need to look into options of settlement funding if you don't have sufficient access to money readily available.
The principle of settlement funding is simple: a lender provides cash advances to the requester in anticipation of a compensation settlement.
Here is what typically happens. The injured party, respectively the representing attorney, files an application with a financial institution that offers settlement funding options. The application will then be internally reviewed and an evaluation will be made based upon the likelihood of a successful verdict or 'before trial' settlement. Further to that, it will be estimated how much compensation money the plaintiff can expect. After that a decision is made and if it is in favor of the applicant, he will have to sign a contract holding the terms and conditions, before he will receive the settlement funding money.
Once the case is closed and the plaintiff awarded with his compensation, he will have to pay back the lender the loaned amount alongside with accumulated interest and other fees that may apply. At first glance this appears to be a win-win situation. But there is more than meets the eye and before signing a contract with a settlement funding lender, the overall situation needs to be carefully looked at and all aspects taken into consideration.
The fact of the matter is, a funding company will reject any application for cases that have only a little chance of being litigated successfully. Furthermore and as mentioned earlier, the interest rates and financial charges that are part of the contract are typically quite substantial, and it is certainly advisable to do the math before putting a signature under a funding contract prematurely. An alternative to a settlement funding would be taking out a traditional loan. And there is a significant legal distinction between the two models. A regular loan is granted with the expectation of the recipient to pay back the full amount, plus interest, by a certain date. Whereas a settlement funding cash advance is based on a specific, yet projective, amount.
And this is where it gets complicated. Because a pre- settlement funding might not necessarily always be the best option. However, in order to make that determination it is recommendable to consult with your lawsuit settlement attorney. He will be able to provide you with expert advice and help you to make a decision on your funding options, based upon your individual circumstances.
The principle of settlement funding is simple: a lender provides cash advances to the requester in anticipation of a compensation settlement.
Here is what typically happens. The injured party, respectively the representing attorney, files an application with a financial institution that offers settlement funding options. The application will then be internally reviewed and an evaluation will be made based upon the likelihood of a successful verdict or 'before trial' settlement. Further to that, it will be estimated how much compensation money the plaintiff can expect. After that a decision is made and if it is in favor of the applicant, he will have to sign a contract holding the terms and conditions, before he will receive the settlement funding money.
Once the case is closed and the plaintiff awarded with his compensation, he will have to pay back the lender the loaned amount alongside with accumulated interest and other fees that may apply. At first glance this appears to be a win-win situation. But there is more than meets the eye and before signing a contract with a settlement funding lender, the overall situation needs to be carefully looked at and all aspects taken into consideration.
The fact of the matter is, a funding company will reject any application for cases that have only a little chance of being litigated successfully. Furthermore and as mentioned earlier, the interest rates and financial charges that are part of the contract are typically quite substantial, and it is certainly advisable to do the math before putting a signature under a funding contract prematurely. An alternative to a settlement funding would be taking out a traditional loan. And there is a significant legal distinction between the two models. A regular loan is granted with the expectation of the recipient to pay back the full amount, plus interest, by a certain date. Whereas a settlement funding cash advance is based on a specific, yet projective, amount.
And this is where it gets complicated. Because a pre- settlement funding might not necessarily always be the best option. However, in order to make that determination it is recommendable to consult with your lawsuit settlement attorney. He will be able to provide you with expert advice and help you to make a decision on your funding options, based upon your individual circumstances.
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