It can be an awful thing to be waiting for your personal injury lawsuit to settle or to wait for the jury’s decision and award. If you’re severely injured because of what you’ve gone through, you may not be working, and yet the bills will continue to pile up. What do you do? You do have an option, and it’s called a lawsuit loan.
Also known as “litigation financing,” lawsuit loans are a great, no-risk way for you to get a portion of your jury award or settlement BEFORE the decision is actually made. It’s not an option that’s available for absolutely everyone, but if you have a solid case, one that’s likely to win either a settlement or jury award, AND your lawyer has been hired on contingency, you may be eligible.
Are they really loans? How do they work?
Lawsuit loans are really loans, but they work a little bit differently than most types of loans. What happens is this: A company that specializes in this type of funding takes a look at your case and determines that it’s actually valid. (If yours is a frivolous lawsuit, do not even consider applying, since these companies are very strict about the cases they do and do not accept.)
If in fact your case is valid, settlement funding companies make sure that your lawyer has been hired on contingency. That means that your lawyer doesn’t get paid unless you win your case or settle it out of court.
Further, your lawyer has to agree that you can apply for lawsuit loans. If your lawyer does not agree, you cannot do so. If he or she does, though, you’re good to go. You can apply for the loan and the company will “front” you a portion of your likely settlement or award, usually about 10%. If you win your case, the company will ask for its money back, plus interest and fees. You only repay the loan when you have your money in hand.
Here’s the kicker, though. If you do not win your case, you don’t have to pay the money back. That’s right; you simply keep the money that has been lent you, and walk away. The company that specializes in lawsuit loans simply walks away and takes the loss. This is why they have to be so strict about who they do and do not lend to. Despite the obvious restrictions with these types of loans, though, they are a great way to have the money you need to live while you wait for your lawsuit to settle or arrive at a jury award – and there are no up-front or out-of-pocket expenses to worry about.