Individuals involved in a personal injury lawsuit often wonder what settlement loans are, and if it would be a viable solution to their shaky financial situation. These types of lawsuits are known for dragging on for months, sometimes even longer. Meanwhile, injured victims often find they are facing tough financial issues, particularly when they are unable to work. Between lost income and huge medical bills, it can be devastating. Litigation financing is a process that allows those who qualify to get a portion of their expected settlement immediately, so that they can pay the bills and avoid possible bankruptcy.
If you are worried about how you would repay the advance if you were to lose your lawsuit for some reason, no worry. Settlement loans are non-recourse, which simply means that in the event you do not win your lawsuit, you do not repay the advance or any associated fees or interest. You only repay the settlement funding company if you do win, and then only at the time that you receive your money. Therefore, you are never at risk or required to pay anything out of pocket.
Does everyone who applies qualify for settlement loans? No. Those with weak or frivolous lawsuits will not qualify; however, if you have a strong case and have hired your attorney on contingency (meaning you do not pay him or her unless the lawsuit is won), it is likely the litigation financing company will approve a loan. Why? Because most attorneys do not take on personal injury claims unless they believe they can be won – otherwise, it would be time spent and no money made.
Will the litigation financing company do a background check, or delve into your employment and/or credit history? No. With settlement loans, the only information the funding company needs in order to determine if you qualify is documentation regarding your injuries and the details of the accident or situation which caused them. This way the company can have a clear understanding of the circumstances surrounding your injuries. Settlement loans are also considered pre-settlement funding.
Settlement loans are not free, however even with fees and interest, the money you keep in your own pocket after all is said and done is still substantially more than you would have received had you settled for what the insurance company offered. A personal injury lawsuit is the only true way to get the full compensation you deserve; settlement loans allow you to live normally until your claim is settled in court.