If you are the plaintiff in a lawsuit, then chances are that you are looking forward to receiving monetary compensation. However, since the legal process can be fairly prolonged, you might wind up in a financial bind, and that’s when you should figure out how to qualify for a pre-settlement loan.
Pre-settlement lawsuit funding will offer you the best way to receive monetary compensation in advance of the final ruling of your case. It is best to apply for the loan if the lawsuit is likely to end in your favor to avoid experiencing extra financial stress after the case ends. However, it is not a guarantee that things will go your way; that’s why we have to talk about the advantages and disadvantages of a pre-settlement loan.
Table of Contents
- 1 How Does Pre-settlement Lawsuit Funding Work?
- 2 The Pros of a Lawsuit Loan
- 3 1. You Won’t Pay Back the Pre-settlement Until the Case Ends
- 4 2. You Will Pay Nothing If You Lose the Case
- 5 3. Pre-settlement Funding Will Increase the Value of Your Case
- 6 Cons of a Lawsuit Loan
- 7 1. You Cannot Do It Alone
- 8 2. You May Not Be Approved
- 9 3. There Are Added Fees
- 10 If the Pros Outweigh the Cons
How Does Pre-settlement Lawsuit Funding Work?
You will first have to apply with a pre-settlement funding company. After the application, the company will inform you of the documents needed. The application company will review your case and consult with your attorney to gauge how long the case might take and your probability of winning.
Once your case’s value has been evaluated, you will be given a fair amount to pay for your expenses. If you win the case, the loan company will deduct the amount before handing over the rest of the settlement. However, if your case doesn’t go through as expected, you will not pay.
The Pros of a Lawsuit Loan
1. You Won’t Pay Back the Pre-settlement Until the Case Ends
You will not repay the pre-settlement loan until the case ends, and you are awarded your settlement as agreed in the case. Moreover, you will only pay back the amount you agreed on regardless of what you obtain after the judgment.
2. You Will Pay Nothing If You Lose the Case
The lender will carefully investigate your case before awarding you the amount. If you lose the case, you will not have to worry about paying it back. Therefore, don’t worry about paying the amount back if the claim doesn’t go your way.
3. Pre-settlement Funding Will Increase the Value of Your Case
As a plaintiff, if you remove some of your financial pressure by getting a pre-settlement amount, you are placing yourself in a position that you will gain a settlement amount that matches your case’s value.
Cons of a Lawsuit Loan
1. You Cannot Do It Alone
Suppose you want to get pre-settlement funding. In that case, you will have to consult with a legal advisor to help you with everything regarding the claim, and this will include an extra cost to pay the attorney regardless of your financial situation. Speak to your lawyer beforehand so that they help you with decision-making.
2. You May Not Be Approved
Even after your case is evaluated, you don’t need to be approved for the pre-settlement funding. Only claims that clearly show the fault of the defendant are going to be approved.
3. There Are Added Fees
Pre-settling loans are expensive. Remember, the company is not paid when you lose. Therefore, they will need to look for other ways of gaining returns through administration fees and original and additional amounts that don’t have to be upfront.
If the Pros Outweigh the Cons
After researching and realizing that the pros outweigh the cons, make sure that you seek a lawsuit loan from a trusted company with your lawyer’s help. Take enough time to figure out what you want, and through considering the points above, choose a loan plan that is to your advantage.