You may be fighting a pending lawsuit or your case has been settled, payments may be still due. The legal funding are not actually loans, but can be considered as funding in case of pre or post settlement. Therefore, before applying the lawsuit loan, you must take care of the following things:
Last Resort: Taking a lawsuit loan must be your last resort when you have already tried other sources. Try using money from your savings or borrow from your family or friends. You can also consider borrowing from your credit card. As it is not actually a loan, lawsuit funding can be expensive as well as risky. Try using all the cheap cash options before you apply for a lawsuit loan. Using money from your own account is helpful because they are free and nothing will be charged against them.
Progressed Case: Apply if and only if your case has been progressing a bit. Generally the lawsuit funding companies will not advance a loan before 90 days from the date of the accident. Your case can only be allowed if it is developed after realizing its value. The companies generally allow 10% of the case’s worth. During the underwriting process, the documents are reviewed by the funding companies with police reports; the insurance limits and the medical treatment available are also checked properly. The worth of your case can also depend on the damage of properties or the wage loss claims.
As Less As Possible: You should take a loan of an amount as less as possible. As legal funding is risky, you must not overestimate your requirement. As little you can borrow, little you will eventually owe at the end of the lawsuit case. If you run out of money during the case, you can always ask for more loans. You can consider borrowing a specific sum every month for paying your monthly bills. Instead of taking all at a once, you can break your loan into monthly amount for your convenience.
Ask Attorney Or Experts: Your attorney has lots of past experiences and he can easily guide you in choosing the funding companies. Besides providing legal advice, your attorney can also provide additional advice on borrowing from funding companies. He/she may have to sign an agreement with the companies when he/she is involved with your case.
Fees: These loans can be expensive and may possess high application fees. Though all the companies are competing with closer rates, you can shop around a bit for the best rate in the market. Just check whether they are charging in a compound interest method or simple interest method.
Weigh Financing Options: There may be some funding companies who offer customized financing options. You can ensure the most affordable and convenient funding specially customized according to your requirement. For example, some options may possess a flat fee for the loan and some may charge a monthly interest rate against your loan. If you can anticipate that your case may take a longer period of time, choosing the option of flat fee will be better in this case.
Understand Repayment Terms: Before applying for the lawsuit loan, you must go through the repayment terms carefully. Though reputable organizations do not have any hidden charges, you must go through the entire fine print. Understand clearly that in what situations, the terms, conditions and the cost of the loan may change.
Take lawsuit loan from the company from where you have understood all the terms clearly. There may be companies where they do not charge for application and you are required to pay back the money after the case has been settled.
Mark Robinson is a well known attorney who is experienced about the operational processes of the lawsuit funding companies. In this article, he is providing a check list before applying loan from the companies.