Using lawsuit funding wisely can help ensure financial constraints do not force victims into unfair settlements.
Following any kind of accident that leaves you with a severe injury, you may find yourself plunged into dire financial straits. Not only will you need to pay for your medical care; you will also need to pay all your day to day expenses such as rent, a mortgage, car payments, food, gas, etc. Yet if your injury has left you unable to work, this can be all but impossible. Fortunately, lawsuit funding advances offer an option to injured individuals who need help supporting themselves while their cases are in progress. Before you burn through your savings waiting for a verdict in your personal injury case, you might want to consider this option. However, if you do, be sure you fully understand the terms of the loan and the impact it may have on your settlement before you sign on that dotted line.
The Perks:
Lawsuit funding advances have been praised by many experts as a way to equalize the playing field and ensure that both rich and poor plaintiffs have the financial freedom that may be required to bring a personal injury case to trial. Without this funding, plaintiffs might feel pressured to accept an unfair settlement because they lack the resources to take legal action to protect their rights and interests. The beauty of lawsuit funding as opposed to other types of loans is that this funding is directly tied to the success of your case. If you do not win a settlement, you do not have to pay back the loan. With this funding to take care of everyday needs and a skilled personal injury attorney representing you on a contingency fee basis, it is possible for anyone to seek compensation for injury with no money up front.
The Perils:
Opponents of lawsuit funding advances point out that these loans can have very high interest rates and are only loosely regulated in many states. Depending on how much you borrow, how high the interest rate is, and how long it takes your case to go to court, you could end up owing significantly more than you originally thought. For example in one case study a plaintiff borrowed $27,000 and ended up owing $96,000, which ate up a significant portion of his $150,000 settlement.
Bottom Line: Ask Your Attorney
Lawsuit funding advances are best used in cases where there is a very good potential for a large settlement in a relatively short period of time. The best way to determine if a lawsuit funding advance is a good option for your case is to consult an experienced personal injury attorney. Your attorney can help you understand all the vital factors at play, including the likelihood of winning a settlement, the size of that potential settlement, and the length of time the case might take. Armed with this knowledge you can better predict how much you will end up owing to the lawsuit advance lender and decide whether or not you want to pursue financing.
