Settlement Loans: Do You Qualify?

Lawsuits can be long and drawn out; if you have found yourself in the position of being a plaintiff in a personal injury lawsuit, you know that you might wait a long time to see any compensation. This may make you think that you should simply settle with the offending parties upfront, rather than wait for true compensation. However, there is a way to in effect “have your cake and eat it too.” They’re called settlement loans, and what they do is to give you a portion of your settlement or jury award before your lawsuit actually finishes in a no risk loan.

Do you qualify?

To qualify for settlement loans, you have to be a plaintiff in a personal injury lawsuit, and that lawsuit must be very likely to have a positive outcome for you – either settlement or jury award. Further, you have to have hired a lawyer on contingency, meaning that your lawyer doesn’t get paid unless you win. And finally, your lawyer, too, must agree that it’s a good idea for you to apply for settlement loans, in that he or she must sign off on the application with you.

If those things are true, you’re free to apply for settlement loans.

What happens next?

Once you qualify for this type of litigation financing, you apply for settlement funding through a company that specializes in these types of loans. The company will take a look at your application and your case, and will review everything carefully. If they accept your application, you’re given a portion of your likely settlement or jury award, usually about 10%, up front.

Thereafter, your case finishes up, usually either resulting in jury award or settlement. When your case is complete, you simply repay the settlement funding company the loan plus interest and fees.

Here’s what’s important to know, however: If you don’t win your case, in that you receive no jury award or settlement, you don’t pay the money back. You simply walk away with no obligations, and the company that gave you the settlement loan absorbs the loss. There’s no risk to you, because unlike other types of loans, this type of litigation financing requires no repayment unless you win. And if you win, you simply pay the money back plus interest and fees out of the settlement or jury award you receive.

You can see that you have no obligation to pay anything out-of-pocket for settlement loans, and will simply receive necessary money to pay bills and expenses while the long process of litigation continues.

Posted in Financial, Legal