Why a Lawsuit Loan Might Be Right for You
If you have been involved in a civil lawsuit would it benefit you to seek a lawsuit loan? We take a look at what these loans are and whether they could help you during a lawsuit.
When you are embroiled in a civil lawsuit to receive compensation for someone’s wrongdoing, there can be a lot of stress on your shoulders. Some of that stress is emotional and physical, but it can also be financial.
Being out of pocket for someone’s poor intentions or negligence can take its toll, and it can even lead to you being in significant financial strife. If you find yourself in this very situation, it might be worth considering a lawsuit loan. Keep reading to find out what this monetary helping hand entails.
What Is a Lawsuit Loan?
Lawsuit loans, also known as pre-settlement lawsuit loans and accident loans, are funds borrowed against an impending lawsuit settlement. A lawsuit funding business or company advances the money so that plaintiffs can pay their bills and stay afloat before they receive compensation.
How much you can borrow depends on what your expected settlement figure is likely to be. Your chosen lawsuit funding company reviews your case to determine the most appropriate figure, then receives their money from your attorney once settlement has been reached.
If you aren’t convinced that a pre-settlement lawsuit loan is in your best interest, we’ve included some of the many possible benefits below.
Your Financial History Doesn’t Matter
Even if you don’t have the best credit score, most lawsuit loan providers won’t take this into consideration. In many situations, you don’t even need to verify your income or show proof of the costs you need to cover.
If you are involved in a lawsuit, and it’s costing you money you don’t have before you settle, that’s often reason enough to be eligible for such a loan type.
It May Stop You From Accepting Low Offers
Insurance companies will sometimes do everything in their power to pay as little as possible. They do this by responding to your demand letter with a lowball settlement offer that sometimes doesn’t even begin to cover the losses you’ve experienced.
As time drags on and your bills pile up, it can be tempting to accept that offer just to see some money in the bank. Lawsuit loans may stop this from happening. You can fight for your right to appropriate damages, rather than settling for less out of desperation.
You Can Look After Your Health
If you don’t have medical insurance to cover the costs of the care you require, it’s only natural for you to try to put it off. You need quality care to heal and move forward with your life, but an empty bank account means your options are limited.
You may also find yourself in a tricky situation, given that many attorneys recommend healing from your injuries before settling to determine an accurate compensation figure. A pre-settlement lawsuit loan means that you’re able to put your health and well-being first.
They Are Not Personal Loans
While personal loans have their place, they are not suitable for everyone. They can come with expensive repayments, repercussions for non-payment, and high interest rates. Pre-settlement lawsuit loans operate differently.
While you’re waiting to settle your case, you do not have to make any repayments. Instead, the company offering the loan waits until your claim has settled. At that point, they receive money from your attorney, not your bank account.
When a pre-settlement loan company lends you money, they review your case in advance. This gives them an idea of how much your settlement will likely be and the chances of you settling.
There are never any guarantees, no matter how clear-cut your case is. However, if your settlement doesn’t end up being as much as you expected or doesn’t happen at all, your lawsuit loan doesn’t need to be repaid. This can be a weight off your mind if you have just borrowed a significant sum of money to cover your associated costs.
No Restrictions On How You Use the Funds
While some loan types may restrict your use of the money to certain expenses, this is not the case with pre-settlement lawsuit loans. If your injury has meant you need to take time off work, you can use the funds for that purpose.
If your car was damaged beyond repair in the accident, there’s no reason why you can’t buy a new vehicle with those funds to get from point A to point B. Whatever you would use your settlement sum for, you can use your loan for.
Pre-settlement funding is something that can help a lot of people trying to navigate the legal system on a shoestring budget. When someone’s poor intentions caused your financial strife, you shouldn’t be put under even more stress than you already are. Such funding may be worth a closer look if you ever find yourself in this situation.