Lawsuit Loan Eligibility: Who Qualifies for Legal Funding?

Lawsuit loans, also known as legal funding or pre-settlement advances, provide financial relief to plaintiffs awaiting a settlement. In this post, we explore the question of lawsuit loan eligibility what specific factors lawsuit loan companies consider when deciding to fund a particular lawsuit.

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What are Lawsuit Loans?

Lawsuit loans are specialty financial instruments in which lawsuit “lenders” advance plaintiffs money against the future proceeds of their lawsuits. Although commonly referred to as lawsuit loans, lawsuit loan contracts are actually structured as a sale of future lawsuit proceeds. They are a transfer of property rights in a lawsuit settlement which may or may not occur. Because of this, lawsuit loans are not repaid unless there’s a successful outcome. If a case is lost, no repayment is required under the contract.

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What Determines Lawsuit Loan Eligibility?

Lawsuit loan eligibility is entirely dependent upon the lawsuit itself, not necessarily a plaintiff’s financial condition. Certain criteria must be met in order to qualify for a lawsuit loan. Legal funding companies evaluate the strength of the pledged case, the potential settlement amount, and other key factors. Below, we discuss these in further detail.

It Must Be an Active Lawsuit or Claim

Lawsuit loan eligibility requires that you have an ongoing legal claim. Although these claims must be valid, they need not be at the litigation phase. These loans are typically available for personal injury cases, employment disputes, wrongful death claims, medical malpractice lawsuits, and more. If a case is strong and has a high probability of success, the more likely it will qualify for funding.

Attorney Representation Required

Legal funding companies require plaintiffs to have legal representation – usually one retained on a contingency fee basis. A contingency-based attorney (one who only gets paid if you win), is important to the lawsuit loan process because:

• Lawyers usually only work on cases with a high probability of success.
• Lawyers cooperate with the lawsuit loan process.
• Lawyers are ultimately responsible to repay the advance from the recovery.

Case Strength Matters

Funding companies assess the likelihood of the lawsuit’s success. Settlement funding underwriters review evidence, liability, and damages to determine if a case will likely succeed. The stronger the case, the better the chances it will meet lawsuit loan eligibility requirements.

Settlement Value Must Be Sufficient

Lenders provide lawsuit loans based on the estimated settlement value. If the estimated settlement value of a particular case is sufficient enough to cover the loan amount plus fees, lawsuit loan approval is more likely. There is a limit to the amount available however. How much lawsuit funding depends upon many factors. Usually, the amount is 10-15% of the case’s estimated settlement value at the time of funding.

Case Type Matters

Certain cases are more favorable candidates for legal funding than others. Not surprisingly, most of these case types involve attorneys who regularly utilize contingency fee retainers in their practices. Commonly funded cases include:

• Personal injury lawsuits
• Car accident claims
• Slip and fall injuries
• Product liability cases
• Workers’ compensation claims
• Civil rights violations
• Employment lawsuits

Credit Score and Employment Status Are Not Factors

Unlike traditional loans, lawsuit loan eligibility does not depend on credit score, income verification, or employment history. Since the loan is repaid from the settlement, financial status (other than bankruptcy proceedings) is not considered in the approval process.

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How to Apply for a Lawsuit Loan

Applying for a lawsuit loan is straightforward:

1. Application – Plaintiffs provide basic case details and attorney information to the funding company.
2. Case Review Process – The funding company evaluates the case’s strength and estimated settlement value.
3. Approval and Funding – If approved, a contract is forwarded for signature.
4. Funding – Once the contract is executed and received by the company, the plaintiff receives funding, usually within 24-48 hours.
5. Repayment Upon Settlement – The advance is only repaid if the case is successful.

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Conclusion

Understanding lawsuit loan eligibility helps plaintiffs determine if they qualify for legal funding. If you have a strong case, legal representation, and a potential settlement, you may be eligible. Lawsuit loans provide crucial financial assistance, helping plaintiffs cover expenses while awaiting a fair resolution.

If you’re considering legal funding, consult a reputable lawsuit loan provider to explore your options.

Why Choose Fair Rate Funding

You obviously have a choice in who you use for legal funding. We offer:

• Simple and Easy Process – Approval only on the strength of your case.
• Risk – Free Proposition – Only repay if you win your case.
• Rapid Approval and Funding – Approvals often within 24 hrs.
• Up Front Pricing – Absolutely no hidden fees.

Thank you for your interest in Fair Rate Funding.

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