After an auto accident or other personal injury, the insurance company will usually make a low settlement offer hoping the claimant will be want to settle quickly. Many injured victims, especially those unable to return to work and who are watching the unpaid bills pile up, will feel accepting the offer is the only option. In cases like this, lawsuit funding can be used not only to pay the bills and help the victim regain financial independence, but it is also a strategic tool to increase the value of the case.
Like other industries, many lawsuit funding companies heavily advertise, and you will find no shortage of this financial service on the internet.
The first step should be asking yourself why you need the money. Lawsuit funding is provided on a non-recourse, meaning the cash advance is only repaid if you win your case. Because the legal finance company is taking all the risks, this type of funding is more expensive than traditional financing. Therefore, if you don’t need the money to keep a roof over your head, to feed your family, make medical payments, or for other important needs, or, if you have other immediate sources of revenue, you should reconsider seeking a lawsuit cash advance.
If you then decide to consider lawsuit funding, it is important to know key considerations before making a decision.
- Don’t be fooled by promises of fast approvals with minimal paperwork and no obligation to repay if you lose your case. While this is true, these features are now fairly standard across the industry.
- Look for a company that has been in business a long time and has a proven track record. The better lawsuit funding companies will also have a number of positive reviews from past clients and their attorneys.
- Verify that the funding company does not charge up-front or monthly fees.
- Compare interest rates and only do business with a company that offers capped funding so you know in advance the maximum amount you will be required to repay.
- Verify that the lawsuit cash advance is provided on a non-recourse basis, meaning that if you lose the case the repayment is completely waived.
- Only consider a company that will not require you to repay more than your settlement or award, and one that promises compromised results if the case is successful but the result is far less than expected.
- If the funding company seems reluctant to answer your questions or disclose the terms of the cash advance, look elsewhere.
- Communicate with your attorney and let him/her know you are pursuing a lawsuit cash advance. This is important because the funding company must obtain and review case documentation (medical records, complaint, police report, etc.) to approve your funding.
If you would like more information or a free funding consultation, contact Lawsuit Financial toll-free at (877) 377-7848 or complete our online application. One key differences between us and other lawsuit funding companies is that we are a trial lawyer-owned company versus a financial industry-owned company. Our CEO has 39 years’ experience as a trial lawyer and over 18 years as an underwriter and situational analyst of lawsuit funding transactions.