A lawsuit loan is not actually a loan. If you have filed a lawsuit against a personal injury and would like to get a cash advance for the settlement in verdict, then you are eligible for a lawsuit loan. However, it is not appropriate to call them loans because the claimant does not need to pay if he/she is unsuccessful in the lawsuit. Generally, money lending institutions will decide the amount based on the potential value of your lawsuit.
How It Works
If you are not in a position to earn for yourself, and this happened because of someone else's negligence, then you will try to meet your ends by filing a lawsuit against that person. But, it is not feasible to wait until the settlement verdict. You will have bills to be settled, and if you don't, then you might lose your property as well as your good credit. As a temporary solution, lawsuit loans are introduced. This involves receiving money in advance of your lawsuit settlement. You make an agreement with an institution that grants lawsuit loans so that when your lawsuit settles, they get a part of that sum in repayment.
The great advantage of lawsuit loans is that they are no recourse lawsuit funding, so if the verdict is not in favor of you, then you don't have to repay the money you received. Institutions that lend money cannot sue you for payment or demand payment. Your obligation to repay ends when the lawsuit fails. The institution is simply out of the money they risked to give you before the lawsuit was settled.
Institutions carefully review cases and get related details from your attorney in order to make sure that you will most likely win.
When you are the plaintiff in a lawsuit, your lawyer may be confident that you will receive a large settlement. Since you cannot be sure of the time taken for trial, you might run out of balance to meet your daily demands. Lawsuit loans can help you pay your immediate bills and meet your immediate financial needs without waiting for the verdict. Your attorney can also be paid in advance for the anticipated legal fees.
Lawsuit loans don't cost you anything initially and they cost nothing if you lose your lawsuit. Once you receive the settlement, the amount forwarded to you will be paid back along with the interest you agreed upon with the lender.
Not everyone is eligible for lawsuit loans, but, if you are a plaintiff in a lawsuit that could end in a money settlement, you can apply for a lawsuit loan. Many people do so because they need the money to pay their current bills and take care of other financial needs. Many lawsuits are filed because of injury that resulted in affecting the plaintiffs' ability to work, so lawsuit loans often help in taking care of living expenses until recovery.
You can't get a lawsuit loan from your attorney no matter how convinced he or she is that you will win a large settlement. The law and certain ethical considerations prevent your lawyer from giving you lawsuit loans. Brokers and investors grant loans and some companies only handle lawsuit loans for investors and plaintiffs.