Lawsuit Loans – Why Litigation Funding is Increasing in Popularity

More and more people are finding themselves in situations where lawsuit loans are the only way they can afford to file a lawsuit when they have been injured or suffered damages due to accidents or the negligence of others.  Litigation financing allows anyone to have the opportunity to get the compensation they deserve.

The recent economy has put a strain on many clients budgets, and it is becoming increasingly difficult for them to pay bills and meet other financial obligations.  Many lawsuits drag on for months or even years, which is one reason that litigation funding is rising in popularity. It allows a client to proceed with their case without causing such a hardship on their budget.

Litigation financing is helpful to a client in times of litigation, and is non-recourse.  This means that if you don’t win your case, you owe the litigation financing company nothing.  Pre-settlement funding is one option many clients use.  Your attorney can advise you on the best course of action to take when it comes to lawsuit loans.

What exactly does litigation funding mean?  It is simply providing cash advances to plaintiffs and their attorneys prior to their cases being settled.  Many times if you have filed suit against a large company, they will use their huge financial backing as a way to delay the case for as long as possible.  They know that the longer they can delay, the better chance you will settle for less.  For this reason and others, you sometimes need litigation funding.  This helps you cover your expenses over the time period until your case is settled.

What happens when the case is settled?  If you win your case, your attorney gets paid first, with the litigation financing company getting an amount that was previously agreed upon.  In the case of a loss, the company gets nothing.  This is a risk that litigation funding companies take.

What does “lawsuit loan” actually mean?  This term is usually used when referring to a form of pre-settlement loan.  It isn’t actually a loan, but is an advance fee.  Actual loans are usually available to lawyers or law firms, but a plaintiff will not usually be offered a loan.  Plaintiffs are normally offered no recourse lawsuit funding.  This is a general description for the term lawsuit loan.

Litigation funding is important if you have filed a claim and don’t have the financial means to meet your obligations, or your case looks as though it is going to continue well into the future.  If this is true in your situation, speak with your attorney and decide if pre-settlement funding may be the right course of action for you.