The concept of lawsuit funding was created to provide relief to pending litigants who, through no fault of their own, need immediate cash but do not qualify for traditional loan products. For some, these emergency funds make the difference between keeping or losing their home and putting food on the table. It can also provide financial leverage needed to achieve a much higher settlement or verdict.
Despite the popularity of lawsuit funding in recent years, not every plaintiff is a viable candidate. In fact, a most common question among applicants is “Why was I denied?”
Here are some of the main reasons you may be denied a lawsuit cash advance.
You do not have an attorney: When providing a lawsuit cash advance, a legal finance company is investing in your lawsuit. Case documentation from the attorney helps the funding company determine the strength of the case. Without documentation, the underwriters can not make that determination. Additionally, the attorney is responsible for repaying the funding company from the proceeds of the settlement.
You have an attorney: Although you have an attorney, you may still be denied funding if your attorney is not working on a contingency basis or if your attorney refuses to provide case documentation needed by the funding company.
Your case is too new: Funding decisions are based in part on supporting case documentation – accident reports, medical records, test results which may take time to obtain.
You have no equity in the case. Equity is the value of the lawsuit once all of the fees, liens, and any expenses have been taken out of the settlement you should win. If the funding company feels you have no equity, chances are they will not be repaid the cash advance plus a profit.
Your case is not strong enough. The funding company accepts all the risk when approving a lawsuit cash advance. If the plaintiff loses the case, the funding company loses; the repayment is completely waived. Therefore, after reviewing case documentation if the funding company does not feel the case is strong enough for the risk it would take, the application will be denied.
Your case is strong enough: Even strong cases can be denied if there is a strong probability that the funding company will not be repaid. This can happen despite winning your case if the defendant does not have the money to pay the settlement.
You have a type of case we don’t fund: Generally, cases that are eligible for funding are personal injury, medical malpractice, and wrongful death. Workers’ compensation cases are funded on a limited basis.
Lawsuit Financial understands that waiting for a settlement can be financially devastating especially if you are unable to return to work. That is why we do everything possible to help as many plaintiffs as possible. As an industry leader with over 15 years’ experience, simply providing a lawsuit cash advance to a client is not our only responsibility. Our top priority is to do what is best for the client, the attorney, and the case, regardless of whether we turn a profit. Whether your case qualifies for lawsuit funding or not, we can provide direction and knowledge to help you get back on your feet during the litigation process, as well as ensure that you are taking the right steps for your future and security. Our FREE Client Resource Center (CRC), helps clients find local and national assistance options, provide money saving and budgeting tips, and minimize their financial burdens not only during their pending claim, but beyond case settlement. To discuss your case and funding needs, visit us online or call one of our funding specialists or CRC counselors toll-free at 1-877-377-7848.