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Lawsuit Loan Underwriters – Who Makes the Decision?

lawsuit settlement funding

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Lawsuit Loan Underwriters – Essential to the Process

Although lawsuit loan underwriters approve cases for funding, many applicants feel and approval is a foregone conclusion.  However, many applications fall short of the requisite criteria for a funding approval.

More goes into underwriting a lawsuit loan or cash advance than most people realize.  Analyzing each fact pattern, the applicable laws from each state, insurance coverage, damages assessments and a myriad of other factors is the job of the lawsuit loan underwriter.  The professionals who occupy these roles normally come from a few typical occupations.  In this post, we discuss some of the most common.

Most lawsuit loan underwriters have a background in the legal field.  Legal professionals are in an ideal position to best analyze a potential case, identify potential problems, and assess each cases’ likelihood of success.  Legal professionals such as attorneys or paralegals bring their education and experience into the lawsuit funding underwriting process.  Their experiences also assist with client interaction and also allow them to speak intelligently with plaintiffs and their counsel.

Insurance Adjusters for Lawsuit Cash Advance Funding

Individuals who previously worked in the insurance industry also possess valuable experience beneficial to underwriting operations.  Insurance professionals, especially those who were adjusting potential claims (claims adjusters), are able to assess the cases likelihood of a lawsuit’s success at trial. They also have valuable experience in understanding how insurance companies value these claims/lawsuits and what might be offered as a settlement.

Lawsuit Loan Underwriters

Evaluating cases for lawsuit cash advance funding is subjective.  What one lawsuit loan underwriter sees, another may not see because his/her experience is different.  Nevertheless, similar factors are calculated for every applicant.  Pain and suffering, loss wages and/or earning capacity, loss of consortium are simply a few examples of these typical considerations.  Insurance adjusters make good lawsuit funding underwriters because they have seen thousands of fact patterns with similar damages through their work in the claims management field.

Factors such as the particular insurance carrier, relationships with certain adjusters, jurisdiction, venue, lawsuit loan documentation, and a host of others factors, lead to an accurate estimation of a lawsuit’s settlement value.  This estimate is very valuable to those lawsuit settlement funding companies.

Risk Management Specialists as Lawsuit Loan Underwriters

Risk management is also a large part of the lawsuit cash advance funding business.  Lawsuit funding outfits therefore use portfolio managers to add safety to the portfolio through diversification.

For example, a manager’s analysis of and existing lawsuit cash advance funding portfolio could reveal a larger than appropriate amount of TV Mesh lawsuit funding deals as compared to other types of funding such as car accident lawsuit funding.  In response, the manger might then recommend a slow down in the acceptance of these cases for funding or even a temporary shut down until the ratio returns to an acceptable range.

Moreover, portfolio managers ensure that exposure to any one lawsuit cash advance funding deal would not be catastrophic to the entire portfolio if the case should happen to lose.  For example, if there is a $20 million portfolio, the risk manager may suggest that no more than $200,000 be advanced on any one case.  Because any lawsuit funding loss is a total loss, losing a $4 million dollar funding for example, would be a 10% loss of total capital and could be catastrophic to the fund’s profit projections since the return on the remaining capital cannot possibly make up the difference (short term) even in the most optimistic of scenarios.

Final Thoughts about Lawsuit Loan Underwriters

We have provided a few of the most common professional backgrounds often employed by litigation loan companies in an effort to help our readers gain a better understanding of the lawsuit cash advance funding industry.  We trust these writings are successful in reaching this goal.

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.

Give us a call and learn about your options. We are here to help and are at your service.

Thank you for your interest in the lawsuit cash advance funding business.

Lawsuit Loan

Apply Now

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Lawsuit Loan Fees – What You Need to Know

Lawsuit loans, also known as pre-settlement funding, are financial transactions which serve as a financial lifeline for plaintiffs awaiting settlements during lengthy legal battles. They are offered in an unregulated marketplace and as such, pricing can vary immensely. Those wishing to obtain lawsuit loans would do well in understanding lawsuit loan transactions and their cost. In this post, we examine these costs by listing the most common types of lawsuit loan fees. The hope is that you can make informed decisions in your search for financial relief.

What Are Lawsuit Loans?

Lawsuit loans are not typical loans. Instead, they are cash advances provided to plaintiffs based on the anticipated settlement or judgment in a pending lawsuit. If the case is won, the plaintiff repays the lender out of the lawsuit proceeds. If the plaintiff loses the case, the lawsuit loan is not repaid. This non-recourse nature of lawsuit loans makes them attractive, but it also comes at a higher cost.

Personal loans and lawsuit loans are different. Lawsuit “lenders” risk money on advances that may never be repaid. Regular loans imply repayment at some point in the future. Lawsuit loans are entirely dependent upon a successful outcome. They carry more risk. And that additional risk must be reflected in lawsuit loan costs.

Common Types of Lawsuit Loan Fees

Fees on financial transactions generally consist of two types. First, there are up front fees which reflect the costs of investigating the transaction and whether it will be profitable for the lending institution. Second, fees associated with the processing of the transaction itself which are contained in the financial contract signed by the grantor and receiver of the money.

Lawsuit Loan Fees

Up Front Lawsuit Loan Fees

You will generally NOT see upfront lawsuit loan fees in the legal funding industry. This makes sense because plaintiffs seeking lawsuit loans are usually doing so as a last resort to solve their financial troubles. If a plaintiff is having financial issues, upfront lawsuit funding fees are an unnecessary barrier to securing the help they need.

On Contract Lawsuit Loan Fees

The cost of processing lawsuit loans can be offset by on-contract fees. These fees are added to the advance amount and the resulting sum is often referred to as the “purchase price”. That is, the amount of money paid by the lawsuit lender (buyer) to the plaintiff (seller) in the transaction. Remember, plaintiffs sell a portion of their recovery in lawsuit loan transactions. The deals are structured as a transfer of property rights in a portion of the future proceeds of a lawsuit, if any.

Lawsuit loan fees can have any number of labels placed on them. Below we explore some of the more common lawsuit loan fee types.

Lawsuit Loan Rates

One of the most significant costs associated with lawsuit loans is the lawsuit loan rate. Lawsuit loans generally use two different types of rate structures – compounded and non-compounded. Compounded rates calculate repayment by charging a monthly percentage rate applied to the purchase price. The next month, the percentage rate is calculated on the previous month’s balance and so on. Thus, the rate “compounds” on the balance and can be more expensive if the lawsuit drags on for years.

Non-compounded lawsuit loan rates are more common in the industry and companies compete for good cases to fund. This type calculates the percentage rate on the original amount and adds it the payoff. The calculation is always on the original purchase price and not on the payoff balance. To better understand the differences between the two rate structures, please refer to Lawsuit Loans – Getting Down to the Truth.

Fair Rate Funding charges a “fair” rate of 18% of the contract amount every six (6) month period thereafter for preferred cases. We also provide a lawsuit loan price guarantee – if we approve your application and another legal funding company sends you a written contract to advance the same amount at a lower total cost, we will beat that deal or pay you $250 guaranteed!

Origination Fees

Some lawsuit lenders charge lawsuit loan origination fees, which cover the cost of acquiring the case. These are typically a percentage of the loan amount and are added to the advance amount as describe above. Origination fees are common when lawsuit funding brokers refer their clients to funding companies. They need to be compensated for their work and the origination lawsuit loan fee represents this compensation.

Processing Fees

Processing fees are lawsuit loan fees which cover administrative tasks related to your application and approval. These include tracking down documents, contract drafting, tax lien, bankruptcy and child support searches, and coordination with your attorney’s office. Like other lawsuit loan fees, this fee is added to the amount the plaintiff actually receives and is reflected in the purchase price.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Underwriting Fees

Before granting a lawsuit loan, lenders evaluate the merits of the case to assess the likelihood of a favorable outcome. Some companies charge a fee for this evaluation, and this is known as an underwriting fee. It is used to offset the cost of having lawsuit loan underwriters evaluate the claim/lawsuit. They are generally a few hundred dollars but can be higher depending on the case’s complexity.

Settlement Fees

Once your case settles, some lenders may charge an additional settlement fee when collecting their repayment. This fee is usually a flat charge in addition to the principal and interest owed. Although most companies do not charge settlement fees, you should ask whether such fees apply and how they affect the total repayment amount.

How to Minimize Lawsuit Loan Fees and Cost

Loan fees are found in most loan transactions, not just lawsuit loans. These fees are used to offset processing costs in both traditional and legal lending. As noted above, legal lending carries more risk to investors. Lawsuit loan fees are one method used to price in this risk.

The good news is that if you are considering a lawsuit loan, there are ways to minimize lawsuit loan fees. These include:

  • Shop Around – Different lenders offer different fee structures, so it’s essential to compare offers from multiple companies before committing.
  • Negotiate Terms: In some cases, lenders may be willing to reduce their fees or interest rates, particularly if your case has strong potential for a favorable outcome.
  • Borrow Only What You Need: Since interest and fees accumulate over time, borrowing only the minimum amount necessary can help keep the loan costs manageable.
  • Ask About Non-Compounding Interest: Most legal lenders may offer non-compounding interest, which can save you a substantial amount in the long run.
  • Consider Other Funding Sources: Before taking out a lawsuit loan, consider other financing options, such as personal loans, family assistance, or the selling of personal possessions.

Getting Started

Lawsuit loans provide much-needed financial relief for plaintiffs facing lengthy legal battles, but it’s essential to fully understand the fees involved. From lawsuit loan rates to origination and processing fees, the costs can add up quickly, especially if your case takes time to settle. By shopping around, negotiating terms, and borrowing conservatively, you can minimize the financial burden and make a more informed decision that best supports your case.

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.

Give us a call and learn about your options. We are here to help and are at your service.

Lawsuit Loan

Apply Now

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What to Know When Considering a Lawsuit Loan?

Being involved in a lawsuit can be challenging. Whether you’ve been injured in an accident or wrongfully terminated, lawsuits bring a whole host of new experience for plaintiffs. Some might be surprised at the time it takes to ultimately receive compensation. Others experience cash flow issues which are difficult to deal with. Regardless of the reasons why you’re considering a lawsuit loan, you’ve come to the right place. In this post, we examine the things you need to know when considering a lawsuit loan.

What is a Lawsuit Loan?

Lawsuit loans are specialty finance transactions where plaintiffs in civil lawsuits sell a portion of their compensation prior to recovery. Lawsuit funding companies offer this financial service to plaintiffs who are suffering financially and have nowhere else to turn. Lawsuit loans are often a “last resort” to raise immediate cash for these litigants.

How Do Lawsuit Loans Differ from Regular Loans

Considering a Lawsuit Loan

Lawsuit loans are structured as a transfer of property rights in the future proceeds of a case. They are advances on a potential recovery. If there is no recovery (the case is lost), the lawsuit loan is not repaid. Because the repayment of pre-settlement funding is contingent upon the plaintiff’s case settling, there are no monthly payments, collateral, insurance, or credit checks required.

Regular loans are different in that they are either repaid or defaulted upon. The contract specifies repayment at some point in the future under all circumstances. It is not contingent upon a certain event or occurrence. Further, regular loans normally require periodic payments to reduce the loan balance.

Perhaps the biggest difference between regular loans and lawsuit loans is the cost. Because there is additional risk to the “lender”, lawsuit loans are generally more expensive than typical loan agreements. When a lawsuit with funding is lost, it represents a total loss of the funding capital. Lawsuit loan pricing reflects the cost of providing the service and the risk of loss of the entire investment made by the “lender”.

Considering Lawsuit Loan Rates and Fees

Lawsuit loan rates are normally at the forefront of settlement loan regulation arguments made by parties who discourage the practice. Opponents wish to categorize lawsuit loans as regular loans and seek to regulate the practice for plaintiffs’ “own protection” from predatory lending practices.

As described above, lawsuit loan pricing reflects the additional risk lenders must accept to provide these products at a profit. Most states recognize the differences. Some states however, prohibit the practice altogether.

What’s most important when considering a lawsuit loan is to understand exactly what the cost should be. If they are offered in a jurisdiction where lawsuit lending is not regulated, funding companies can charge whatever they want. That’s the bad news.

The good news is that clients can shop for lawsuit loans to find the best deal. And shopping has never been easier since most reputable lawsuit loan companies charge competitive rates to their clients. Even further, many companies adhere to lawsuit loan best practices to help their clients understand exactly what they are getting in return for pledging a portion of their future recovery.

Why Consider Fair Rate Funding for Your Lawsuit Loan

If you are considering a lawsuit loan, you know it can be a great tool to help you get through financial difficulty until your case resolves or you’re able to return to work. If you’ve been injured in an accident and need cash to cover expenses we can help. To apply for a lawsuit loan call Fair Rate Funding at 888-964-2224 or Apply Now online.

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.

Give us a call and learn about your options. We are here to help and are at your service.

Lawsuit Loan

Apply Now

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Learn All the Pre-Settlement Funding FAQs

Much is written about pre-settlement funding and its role in the legal landscape. Although many questions are answered, plaintiffs might want to avoid having to sift through pages of information to answer their questions. In this post, we examine common pre-settlement funding FAQ fielded at Fair Rate Funding and discuss their implications. Many of these topics are discussed in more detail on this site, so feel free to click the links for a deeper look.

How Do I Qualify?

Eligibility for pre-settlement funding requires the applicant be:

  • 18 years of age – applicants must be the age of majority in order to enter into binding lawsuit funding contracts.
  • Have a valid civil claim – pre-settlement funding agreements sell a portion of settlement proceeds in a pending legal claim or lawsuit.
  • Be represented by counsel – plaintiffs wishing to receive lawsuit funding must have an attorney representing them in their lawsuit and legal fees based upon a successful outcome (contingency fee retainers).

Applicants which satisfy the above are eligible to apply for settlement funding.

How Long Does It Take?

Lawsuit funding companies understand that plaintiffs need money immediately. Thus, the lawsuit loan process is designed to get money into the hands of plaintiffs as quickly as possible. That being said, how long for a lawsuit loan depends on a couple of factors.

Pre-Settlement Funding FAQ

The most important time variable involved collecting relevant paperwork from your attorney. Attorney cooperation is a pre-requisite for lawsuit loan approvals. This means attorneys must forward useful documents for review and usually hop on a quick phone call with a lawsuit funding underwriter.

In some instances, the process moves quickly and applicants are “funded” within 24 hours. This is especially true when attorneys have a working relationship with a funding company. In others, compiling necessary documents and/or scheduling a short phone conference takes more time. The good news is that you can help yourself get lawsuit funding quickly by working with your lawyer(s) to move the process along.

What Else Does My Attorney Have to Do?

In addition to forwarding documents and speaking about the case’s merits, your attorney must also typically sign an “Acknowledgment of Counsel.” In this form, your lawyer acknowledges the sale of part of your recovery and often ensures you understand what you are signing. In fact, we strongly recommend you consult with your attorney about the language contained in the funding contract and before you sign any legal document whatsoever.

How Much Funding is Available?

How much legal funding you will receive depends upon the strength of your lawsuit and the extent of your damages. If you search the pre-settlement funding FAQ page on most funding company websites, you will find that as a general rule, companies offer 10% – 15% of the underlying case value. The company approximates the likely settlement value after all information is considered.

Regardless of how much legal funding is available, we recommend you only take an amount that reflects your immediate needs. Although our lawsuit loan rates are among the lowest in the business, lawsuit loan cost can be expensive. Instead of cashing out for the maximum amount available, simply get the cash you need to pay your expenses while you wait for the case’s conclusion.

What are Typical Lawsuit Loan Rates?

Lawsuit loan rates can be confusing. But they don’t have to be. When plaintiffs shop for lawsuit loans, they might find many company websites fail to mention lawsuit loan rates. Reputable lawsuit loan companies however, will offer this information freely. Many will provide lawsuit loan rate pages discussing not only lawsuit loan rates, but also how the contracts are structured and what other costs may be associated with these transactions.

As a general rule, you can expect to pay 18% every six months for a lawsuit loan. Unlike traditional loans or other lawsuit loan alternatives, the money is not repaid until the case is resolved in your favor and out of the recovery itself.

Low Price Guarantee

To ensure you get the best possible terms, applicants might want to consider a company which offers a lawsuit loan price guarantee. In an effort to obtain more plaintiffs to help, some companies will guarantee the lowest possible terms. Most are written as some variation of:

If we approve your application for a cash advance and another legal funding company sends you a written contract to advance the same amount at a lower total cost, we will beat that deal or pay you $250 guaranteed!

Price guarantees protect the consumer. But they are a win for funding companies as well since in theory, origination costs are minimized by the practice.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

What Happens If the Case is Lost?

Lawsuit loans are structured as an assignment of property rights in lawsuit proceeds. They are an asset sale, although the value is not yet determined. So if a lawsuit is lost, the lawsuit loan is not repaid since what was purchased has zero value.

Lawsuit funding investments carry some risk of loss. Lawsuit loan pricing reflects this risk. While some lawsuits lose, most don’t. It is the winners that carry the cost of the losing cases.

The bottom line is that if there is no recovery, there is no repayment – period.

How Do I Shop for Lawsuit Loans?

Choosing the right lawsuit funding company may seem daunting. Despite the large amount of players in the market, not all provide stellar service and competitive pricing. It’s easy to get lost in the sea of information.

Fortunately, you’ve landed in the right place because Fair Rate Funding offers:

  • The lowest interest rates — guaranteed;
  • No hidden fees;
  • Clear and concise terms;
  • Adherence to Lawsuit Loan Best Practices;
  • A quick and easy application process; and
  • Live people answering your calls.

How Do I Learn More?

Our lawsuit funding representatives are standing by ready to answer any questions. We are ready to help you get access to the financial support that you need to pay your bills.

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.

Give us a call and learn about your options. We are here to help and are at your service.

Thank you for your interest in these pre-settlement funding FAQ and lawsuit loans.

Lawsuit Loan

Apply Now

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Costs to Sue Someone Can Add Up Quickly

Suing someone can be a complicated and costly endeavor, with expenses that can add up quickly. Costs to sue someone can vary widely depending on various factors, including the nature of the case, the jurisdiction, legal fees, court fees, and other related expenses. In this article, we will explore the different components that contribute to the overall costs to sue someone.

Legal fees are a significant portion of the cost to sue someone. Attorneys typically charge an hourly rate or a flat fee for their services. The complexity of the case, the experience of the attorney, and the filing jurisdiction can all impact legal fees. Some attorneys may offer a free initial consultation to discuss the case and determine the potential costs involved.

Types of Legal Fees:

Costs to Sue Someone
  • Hourly Rate – Some lawyers begin engagement with an hourly rate. For each hour, or portion of an hour an attorney works on your case, your legal fees will increase. Hourly fees are often the most effective type of retainer arrangement for minor legal disputes since few hours of an attorney’s time are needed.
  • Contingency Fees – In many personal injury or collection lawsuits, a lawyer will accept a contingency fee as opposed to payment up front. With contingency fee retainers, the client generally only pays if the case is successful and are generally based on a percentage of the compensation the client recovers.
  • Flat Fees – Some lawyers will charge a flat fee for some services. For example, if you hire a lawyer to manage a property dispute, the lawyer might charge a flat fee for filing with the court. Many lawyers who help deal with lawsuits may not choose the flat fee approach since time spent working on the case can vary dramatically between one claim and another. However, in the case of seemingly minor claims, you may work with your attorney on a flat fee arrangement.
  • Retainer Fees – Retainer fees help secure a lawyer’s services even when you may not necessarily use them. Businesses, people who may have a lawsuit pending, or people who regularly deal with lawyers will often pay retainer fees to serve as a down payment against future costs and ensure that they have a lawyer on hand if they do need legal services for any reason.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Filing Fees

When you file a lawsuit, you must pay a fee to the court to initiate the legal process. Filing fees are included in the costs of suing someone and can vary depending on the type of case and the court where the case is filed. Small claims courts usually have lower filing fees compared to higher courts.

Service of Process

Before a lawsuit can proceed, the defendant must be properly notified of the legal action. This is known as “service of process” and involves delivering legal documents to the defendant. There are costs associated with hiring a process server or using certified mail to serve these documents. These are added to the costs of suing someone.

Court Costs to Sue Someone

Throughout the legal process, various court-related costs can accumulate. Charges for court transcripts, document copying, and other administrative expenses are added to the costs to sue someone. Additionally, some courts charge fees for motions, subpoenas, and other legal actions.

Mediation and Alternative Dispute Resolution

Alternative dispute resolution (ADR) refers to different ways litigants can resolve disputes without a trial. These methods might include arbitration and mediation. Many jurisdictions require or encourage parties to attempt mediation or other forms of alternative dispute resolution before going to trial. Mediation costs can vary, but they generally involve fees for the mediator’s services and any associated administrative costs. These fees are in addition to the other costs to sue someone.

Expert Witness Fees

In certain cases, you may need to hire expert witnesses to provide testimony or opinions related to the case. These experts often charge significant fees for their time and expertise.

Travel and Accommodation

If your case requires travel to a different city or state for hearings, depositions, or trial, you’ll need to budget for travel expenses such as transportation, lodging, meals, and incidentals. These ancillary costs to sue someone can be substantial and should not be overlooked.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

Appeals

If the case is appealed, additional legal fees, court costs, and expenses may arise during the appeals process.

Indirect Costs to Sue Someone

Apart from direct legal expenses, there are indirect costs to sue someone to consider, such as the time and effort you’ll invest in the case. This includes taking time off work for court appearances and legal meetings.

Paying for the Costs to Sue Someone

The costs to sue someone can feel daunting, especially if you are short on cash. If you cannot afford a lawyer there are several options available, these include:

Contingency Fee Arrangements

As described above, contingency fee retainers can go a long way to reduce the costs to sue someone. If a law firm believes you have a strong likelihood of winning your case, they might be inclined to offer you this type of arrangement. Since a bulk of the cost to sue someone is made up of legal fees, contingency fee engagements will prevent you from having to worry about finances while managing your claim.

Use Legal Funding Services

Pre-settlement legal funding can make it much easier to pay legal fees and manage your other expenses while dealing with a complex lawsuit. Look for a lender that will provide cash on a non-recourse basis. This will ensure you don’t lose the money you pay for legal services. Make sure you have a solid idea of the pros and cons of lawsuit loans as you decide how you want to handle your legal costs.

Take Out a Loan

Taking out a loan can mean expensive interest payments, especially if your lawsuit ends up taking longer than anticipated. However, in some cases, a personal loan can help provide the funds you may need to cover legal fees.

Funding The Costs to Sue Someone

Suing someone can be financially challenging, but there are funding options available to help cover the costs. Some people may use personal savings, while others might consider loans, legal financing, or contingency fee arrangements with attorneys.

It’s important to carefully weigh the potential financial costs and benefits of pursuing a lawsuit. Consulting with an attorney and thoroughly understanding the potential expenses can help you make an informed decision about whether to proceed with legal action.

In conclusion, the cost of suing someone can vary significantly based on multiple factors, and individuals should carefully evaluate the potential expenses and financial implications before initiating legal proceedings.

Lawsuit Loan

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How is Pre-Settlement Funding Different from Regular Loans

As you know, settlement funding seeks to level the playing field between well financed insurance companies and often under capitalized individual plaintiffs. The idea is to allow plaintiffs to refuse less than fair settlement offers simply because they are in a cash crunch. Pre-settlement funding is different from regular loans. In this post, we examine why.

Plaintiffs Who Need Cash Turn to Various Options

Plaintiffs, many of which are injured, often encounter financial difficulty while their cases progress through the legal system. The wheels of justice turn slowly as many cases take several years to reach a conclusion.

Dealing with a lawsuit is difficult enough. Coping with financial trouble only compounds the problem. Plaintiffs will turn to various sources of cash to ease their financial burdens. Although settlement funding and regular loans are different, they are two possible alternatives to securing financial support.

Settlement Funding Basics

Settlement funding is also known as settlement loans and are advances on a potential future settlement. They are structured as asset purchase agreements. That is, the lawsuit lender purchases a portion of the future asset (lawsuit recovery). In return, the plaintiff pledges, through the attorney, to repay the advance according to the contract terms. Repayment is dependent upon the amount of time which elapses from the contract date and settlement. Repayment is also contingent upon a successful outcome. If the lawsuit is lost, the advance is not repaid since what was purchased (the settlement) does not exist.

Regular Loans are Different

Settlement funding is different than loans because regular loans imply the amount borrowed must be repaid with interest at some point in the future. Unlike settlement loans, regular loan repayment is not dependent upon any other factor. Instead, it is assumed the loan will be repaid by the borrower over time.

Settlement Funding Different Than Loans

This is why traditional loan underwriting is different than lawsuit loan underwriting. The former factors in the borrower’s creditworthiness through income verification, credit scores, asset searches, etc. If the borrower defaults, the lender has the right to pursue the borrower personally for any short fall or obtain collateralized or other property to pay off the debt.

An example of this is a home foreclosure. When a home is bought with a loan, the borrower signs the note. This is the debt agreement and outlines the payment terms and interest rate. The borrower also signs a mortgage which gives the bank certain rights under the law.

Mortgages are “secured transactions“. This means the bank retains a security interest in the property (collateral) until debt is paid in full. If the payments are not made, the bank forecloses on the property and sells it in the open real estate market. The money obtained is then used to satisfy the debt.

Settlement Funding Different than Loans

Settlement funding is different than loans in other ways as well. First, settlement funding is non-recourse. Under the contract, repayment comes from the settlement proceeds themselves, not payments made by the plaintiff personally. In fact, settlement funding companies cannot pursue plaintiffs personally for repayment. Further, there are no payments made under settlement funding agreements. This is different than typical loans.

Second, the criteria for evaluating loan applications are not used for settlement funding. Credit scores, income verification and asset searches are typically not used for settlement funding clients. Instead, the likelihood of the lawsuit’s success is the determining factor.

Settlement Funding Benefits

Since settlement funding is different than loans, it is wise to examine some settlement funding benefits.

As mentioned above, there are no periodic payments due under settlement funding contracts. Instead the payment is made at the case’s conclusion and only if the case is successful. Thus, an applicant need not worry about monthly payments.

Second, settlement funding requires no collateral which is unlike traditional secured financing loans. Although repayment is based upon a future asset (the lawsuit proceeds), as explained above, this is actually a sale of property.

Third, settlement funding companies essentially share the risk the plaintiff might lose his/her case. Remember, repayment is dependent upon a future outcome. If case is lost, plaintiff “keeps” the settlement funding.

Finally, the manner in which settlement funding is approved is different than loans. Evaluating a lawsuit for funding is different than evaluating a loan applicant’s creditworthiness. The result is the speed in which plaintiffs can access cash. Plaintiffs are routinely funded within days of application.

If You Have Any Questions, Call 888-964-2224

WE ARE HERE TO HELP YOU!

How to Get Started

Plaintiffs must follow a straightforward lawsuit loan process to secure pre-settlement funds. Pre-settlement funding applications typically require:

  • Information about the case and the expected settlement amount.
  • Contact information of the plaintiff’s attorney.
  • Certain documents such as medical reports, insurance information and medical records.

To get started, simply contact us at 888-964-2224.  One of our representatives will guide you through the process. We are here to help you get what you need, when you need it.  When financial strain forces you to consider accepting less than you deserve, don’t wait – call Fair Rate and let us help you. Apply Now.

Thank you for your interest in lawsuit settlement funding.

Lawsuit Loan

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What Lawyers Should Know About Lawsuit Settlement Funding

On occasion, we are asked what benefits a lawsuit settlement funding company can offer personal injury attorneys whose clients need funding.  That is, clients who have an immediate need for cash but who have already exhausted or otherwise do not have other avenues of cash currently available to them.

Even the best lawsuit loan companies sometimes meet resistance from law firms when their clients apply for a cash advance.  The reasons usually revolve around a negative stigma attached to the litigation finance industry with regard to price AND the idea that counseling clients with regard to financial transactions is usually outside the scope of their representation.

Below, we examine the top 5 things attorneys should know about the lawsuit funding business in an effort to address some of these concerns.

Not All Lawsuit Settlement Funding Terms are Oppressive

Lawyers Should Know About Lawsuit Funding

The lawsuit settlement funding industry has evolved since its inception approximately 15 years ago.  Not only have case origination and processing systems become more efficient, but there is also much more competition in the marketplace.  Thus, lawsuit advance outfits are forced to take a more competitive approach to pricing.  In fact, case loans are routinely offered at lower pricing structures than at any other time previously.  All of this has occurred in an unstable economic climate.

Today, it is not uncommon for lawsuit advances to be offered for up to 12% of the case’s value.  And for less than it costs for an advance on a credit card.  Of course, there are some lawsuit settlement funding companies who have different portfolio objectives and must charge more expensive “rates” and fees to meet their objectives.

Rate is of Paramount Importance when Settling the Case

Lawsuit settlement funding operations are well aware of the need to settle cases.  Attorneys who work on a contingency fee basis, such as personal injury lawyers, understand pre-trial settlements make sense and are in the best interests of all parties.  Most plaintiff attorneys would agree even if a favorable verdict is reached, they still have to spend considerable time and money pursuing justice in the appellate courts.  Lawsuit funding professionals, many of whom are attorneys themselves, are intimately aware of this fact.

Therefore, lawyers should know that lawsuit funding liens rarely hinder settlement negotiations.  In fact, many steps are taken to ensure this unfortunate circumstance remains the exception rather than the rule.  One such example involves how much lawsuit funding is available in the first place. Most funders limit a “lawsuit loan” to 10% of the estimated value of the case.  With today’s rates and fees, a lawsuit cash advance on pending case fails to reach a level where the plaintiff and his attorney would be unable to settle the matter because of the lien.

Further, funding companies are usually flexible for purposes of settlement.  If an unforeseen issue arises which would negatively impact the ability to recover damages, funding outfits – like most investors who want to ensure the safety of their risk capital first – would be likely to compromise the requirements of their contract in an effort close the file and move on.

Lawsuit Funding Applicants Need Attorney Cooperation

What lawyers should know about lawsuit funding is that the whole process of offering money against the future proceeds of a legal proceeding depends on attorney cooperation.  From the moment an applicant requests funds, the attorney’s participation is required.  First, his office must forward the relevant documents supporting the claim.  Next, a conversation between the funding company and the attorney must occur prior to lawsuit loan approval.  Once approved, attorneys must then acknowledge the lawsuit settlement funding agreement and recognize it as a valid lien on the file.  The transaction is finalized and matter concluded when the attorney forwards a check from his trust account directly to the funding company.

Most funding operations will not advance money against a lawsuit without the attorney participating in the transaction, at least on a limited basis.  Without attorney participation, the funding process simply cannot happen.

Clients Need Speed

Lawyers should also know most lawsuit funding lawsuit funding clients need money immediately.  It is doubtful any attorney who practices personal injury law has not had a client request an advance on his case.  Of course, many state ethical rules prohibit this type of assistance.  This hardly helps plaintiffs who are behind on their bills or otherwise have financial difficulty.

What attorneys should realize is the process can and will move smoothly if the documents requested are forwarded in a timely manner.  Most lawsuit loans are approved with less than 30 pages of documentation being analyzed.  These papers can be faxed or emailed with minimal amount of time spent on the part of the lawyer or his support staff.  The approval process moves quickly. The funding company does its job and the client gets much needed relief as soon as possible.

Similarly, approvals for many lawsuit settlement funding applications, especially the larger deals, depend heavily on a successful conversation with the attorney about the merits of the case and other relevant issues.  Realizing an attorney’s time is limited and valuable, lawsuit settlement funding underwriters do whatever is necessary to keep the conversation focused on only the most material considerations.

Keeping it “short and sweet” helps funders, attorneys, and clients alike by keeping the process moving along.  The sooner the case can be underwritten, the sooner the client can get the help he needs.  The attorney gains the reward of a grateful client and another task deleted from his list.

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Lawsuit Settlement Funding is a Business

Attorneys who have clients wishing to obtain money from litigation finance professionals should keep in mind the business of offering legal loans is exactly that – a business.  Like any other business, there are origination costs in the form of advertising or other marketing efforts, cost of inventory (money), and administrative expenses just to name a few.  Further, it is the goal of any service based business to provide the service and turn a profit.

I mention this because many attorneys feel the need to negotiate the terms of a lawsuit funding transaction AFTER the case settles.  Understandably, plaintiff’s counsel will try to negotiate all liens if it increases the chance to settle a case.  However, some attorneys want to negotiate the payment terms after a settlement is in place simply because they feel they can.

The appropriate time to negotiate is before an agreement is executed, not after.  Further, offering the lawsuit settlement funding company its money back, for example, is not operating in good faith.  It is simply good business to allow a business to turn a profit.  As we all know, a win – win scenario is the goal.  If any business is not allowed to make money, it will soon be out of business.  Lawsuit settlement funding is no different.

Fortunately, the pre-settlement finance business is becoming more efficient every day and offers clients the ability to weather the financial storm while the case is being litigated.  In other words, lawsuit settlement funding is part of the personal injury game.  A game that keeps reinventing itself from year to year.  Though many changes arise, the main goal remains the same – to help clients achieve justice.

Thank you for your interest in the lawsuit settlement funding business.

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Looking into Lawsuit Loan Cost

The lawsuit loan, also known as lawsuit funding or pre-settlement funding, is a unique investment. Its structure allows investors to assist plaintiffs in ongoing litigation with immediate cash to help pay their expenses while the lawsuit is litigated. This post analyzes lawsuit loan cost and helps identify the unique nature of these specialty finance products.

Lawsuit Loan Cost Reflects Cost of Production

Wherever there is a need, you will find entrepreneurs trying to fill that need. In any business, there are costs associated with providing the service or product.  The lawsuit loan business is no different.

lawsuit loan cost

Occasionally, critics target lawsuit loan cost as too expensive or predatory to those who are desperate for financial resources.  Despite these claims against the cost of the lawsuit loan, lawsuit loan cost simply represents the cost of providing the service for profit.  Lawsuit loan “rates” are certainly larger than mortgage rates or car loans.  But major differences separate these types of monetary transactions.  In truth, a lawsuit loan is far different than a car loan or a mortgage – regardless of the use of the word “loan”.

Lawsuit Loan is a Misnomer

The term “loan” implies repayment at some point in the future.  Car loans, home loans, and others are “secured” by collateral.  That is, the car or home can be “repossessed” and sold by the lender to satisfy some or all of the loan principal and costs.

To be sure, other loans are not collateralized, and as such are deemed “unsecured loans”.  Simply because a loan is unsecured however, does not mean the lender has no recourse.  In fact, unsecured debt is collected in a myriad of ways after a borrower defaults.  It is common for judgements to be entered and wages garnished in collection of unsecured debts.

Contrast this with the non-recourse nature of a lawsuit loan.  In a lawsuit loan transaction, no collateral is offered.  The client assigns a portion of the proceeds of the lawsuit to the funding company in exchange for a present sum of money.  Because the transaction is structured in this manner, the only transfer of value for purposes of collection, occurs if the lawsuit is successful.  Therefore, lawsuit loan deals are deemed “non-recourse” which means the lawsuit loan company cannot collect directly from the client in the event the lawsuit is lost.

The failure of clients to be personally liable for the repayment of lawsuit loans makes it a more risky proposition for investors.  That risk must be represented in the pricing and is a reflected in lawsuit loan cost industry wide.

If You Have Any Questions, Call 888-964-2224

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Lawsuit Loan Cost and Risk Assessment

20 years ago, when the lawsuit loan business was at its infancy, lawsuit loan companies charged high rates and fees for lawsuit cash advances. Lawsuit loan cost has decreased since that time as more historical data became available.  With this data, investors were better able to assess the risk of loss and expected return. Until only a few short years ago, investors were ‘flying blind’ in an investment arena without a suitable data set of historic returns.

While lawsuit loan cost is lower than in years past, the average lawsuit settlement loan still commands a higher cost than a car or home loan. But this is true because the two are entirely different transactions as discussed above. 

For example, a car loan is secured debt which means that if payments are not made, the creditor can repossess the vehicle in partial payment of the loan.  Further, the lender can collect on the loan by attaching a claim on any other asset the client might own.

Conversely, a lawsuit loan is “non-recourse” in that if there is no recovery, the advance is not repaid. The lawsuit funding company purchases a portion of the proceeds of the case. So the transaction is really a asset purchase instead of a loan.  If the lawsuit is unsuccessful however, the investor has NO claim against the plaintiff. Repayment must come from the lawsuit itself, that is the risk the lawsuit loan cost reflects.

In Conclusion

As the lawsuit funding business evolved, it became more efficient.  Because of competition, this efficiency reflects in pricing.  And the savings are ultimately passed on to the client.  Perhaps this is the most important reason why the quality of cases ultimately approved for a lawsuit loan is increasing and the price points for these “preferred cases” is decreasing.

Thank you for your interest in lawsuit loan cost.

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Lawsuit settlement funding companies field hundreds of questions each day.  One frequent question asked by plaintiffs is “Why do lawsuits take so long to finally a settlement?”

lawsuit-settlement-funding
lawsuit-settlement-funding

Of course, there may be many reasons.  One major reason relates to the complexity of litigating a personal injury lawsuit.  Indeed, both plaintiffs and defendants must jump through many “hoops” in order to prove or defend a lawsuit.

Lawyers attempt to represent the best interests of their clients and navigate the applicable laws and rules in order to protect them. They know what the procedures are and follow the rules to move things along as quickly as possible.  Without attorneys, plaintiffs would be lost in a sea of rules and regulations, much of which they could not possibly understand without proper training.

Typically, lawyers meet with their clients, then communicate with the other side’s attorney. After investigation, the lawyer and client will decide what course of action to take – one of which is whether to file a formal complaint or to try to settle without going through the court system.

If the plaintiff decides to file a complaint, the fun has just begun.  In most civil actions, such as personal injury cases, court rules call for the parties to exchange pertinent information about the case.  This is the part of the lawsuit known as “discovery” and could take years to complete depending on the type of case, length of treatment, etc.

In some personal injury cases, a judge sets forth a schedule of deadlines. Each one represents an important step that must be followed. Most of the time, these dates are anywhere from 30 to 60 to 90 days apart. During the process, both parties answer written questions asked by the other side called interrogatories. They must be answered truthfully and by a deadline. After that, lawyers are allowed to talk to witnesses for the other side, but only with the other attorney present. These sessions are called depositions and they are often delayed due to the scheduling conflicts of attorneys, clients, and/or expert witnesses.

Sometimes lawyers disagree about different procedures they must follow.  This can result in another delay because matter must be presented to a judge for a decision. In some jurisdictions, it could delay the proceedings several months just to present the specific issue to the court.

Once discovery is complete and as the trial date approaches, the parties attend a special meeting called a pre-trial conference.  The purpose of this meeting is to map out a how things will proceed. Many final issues as to the admissibility of evidence for example, are decided at this time.

Afterwards, the trial ensues and will most likely take a least a week to decide.  Then post trial motions are heard and  depending on the circumstances, an appeal may be heard, since both parties have the right to appeal.

Even when all of these steps are concluded, there is a certain amount of time that must pass before plaintiffs receive their money. Sometimes the recovery is paid in a lump sum. Other times, it is structure to be paid in installments.

Lawsuit Settlement Funding Bridges the Gap

With all of the intricacies of litigating lawsuits, it is no wonder why settlements take more time than one would expect.  One question naturally arises from this process:  What are litigants to do if they encounter financial difficulties while the case progresses?

Plaintiffs often find other means of financial support.  One such solution is lawsuit settlement funding.

Lawsuit settlement funding is a financial transaction where a plaintiff sells a portion of the future proceeds of his/her lawsuit in exchange for cash now.  When the case is settled or otherwise successfully resolved, the lawsuit settlement funding is repaid to the funding company.

Lawsuit settlement funding should not be confused with a loan, although sometimes lawsuit settlement funding is referred to as “lawsuit loans” or “settlement loans”.  The term “loan” implies that the money must be repaid at some point in the future.

Alternatively, the lawsuit cash advance (lawsuit settlement funding) is non-recourse, which means that if for ANY reason the lawsuit is not successful, the lawsuit settlement funding is not repaid.

Clearly, lawsuits can take time.  When plaintiffs need lawsuit settlement funding to meet financial obligations, Fair Rate Funding is there to help. When you qualify for a settlement loan, we provide you with money. After the trial is over, or if the case settles during the litigation process, the money is repaid.  There are absolutely no up front costs to pay and no restrictions on the money’s use.

Thank you for your interest in the lawsuit settlement funding business.

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A FedEx truck driver has filed suit against the city of Memphis and its former Police Chief after an auto accident on June 23rd.

Auto Accident Settlement Funding
Auto Accident Settlement Funding

The civil action lawsuit, filed in Macomb County Circuit Court, stems from a two-car accident which left both vehicles totaled and left the FedEx truck driver, Sean Wood, seriously injured.

Former Police Chief, Beels Koveck, was driving a city police vehicle at the time of the accident. According to police reports, Koveck ran a stop sign on a gravel road and slammed into the side of Wood’s FedEx truck, sending the struck vehicle careening into a nearby ditch. Despite being found at fault, Koveck did not receive a citation from Michigan State Police who responded to the accident.

Woods suffered significant injury in the crash, requiring extensive corrective surgery to his ALS. Woods has been unable to return to work following the accident owing to his injury. Woods is seeking damages for pain and suffering, medical expenses, legal fees, and for lost wages.

“She admitted she ran the stop sign and witnesses state it was at a high rate of speed with no attempt to stop” said Christian P. Collis, Woods’ attorney, “So I don’t think it will be hard to show… gross negligence.”

Auto Accident Settlement Funding Helps Plaintiffs With Cash Now

That being said, Woods still has a long and difficult court battle ahead of him. Filing a lawsuit against a public official can result in a protracted and messy proceeding. As the case drags on, Woods’ medical cost fees will begin to mount, putting increasing pressure on him to accept an early ‘low ball’ offer as final settlement.

Settlement funding from Fair Rate Funding could help someone in Wood’s position endure the financial hardships of an extended legal battle. Auto accident settlement funding is a non-recourse cash advance available to plaintiffs in a variety of civil suit proceedings, including automobile accident suits. Settlement funding provides money in anticipation of a successful settlement of judgment; money that can be used to pay medical expenses, to compensate for lost wages, or for any expenditure the applicant decides. And if the borrower fails to win their case, the funds do not have to be paid back.

Unlike traditional loans, Auto accident settlement funding is awarded based on the strength of your suit, not your credit or employment history. The funds can be made available as little as 24 hours and there are no upfront fees associated with securing settlement funding. You don’t pay until you win your case. And if you don’t win, you are not required to repay anything.

If you or someone you know is going through the long and costly process of fighting for a fair settlement in an automobile accident lawsuit, consider obtaining Auto accident settlement funding. It can give you the financial flexibility to keep up your fight without feeling the pressure to settle for less than you deserve.

https://www.voicenews.com/articles/2014/10/28/news/doc544abba1dbda3657486895.txt

 

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