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How Lawsuit Loans are Repaid

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Repaying Lawsuit Loans

Plaintiffs who are interested in lawsuit loans as a liquidity solution often ask how lawsuit loans are repaid. The answer is pretty simple and straightforward. But there are some important things you need to know. In this post, we examine how lawsuit loans are repaid, under what circumstances it is necessary, and what steps are involved. Understanding the repayment process is key before securing this legal funding.

What Is a Lawsuit Loan?

Lawsuit Loans are Repaid

Lawsuit loans, also known as pre-settlement funding or legal funding, are specialty financial transactions where plaintiffs sell a portion of their future lawsuit recovery to “lawsuit lenders”. They offer immediate cash to plaintiffs who find themselves financially strained for a variety of reasons. Lawsuit loans are popular because they provide immediate access to cash to pay for any type of expenditure. Legal funding is most often used to pay:

  • living expenses
  • medical treatment
  • past due accounts
  • rent or housing costs
  • and more.

Lawsuit loans are often provided within 24 hours, making them even more attractive to plaintiffs with immediate financial concerns.

Repaying Lawsuit Loans Depends Upon Contract Structure

Pre-settlement funding is unique in the sense that lawsuit loans are repaid only when the lawsuit results in a successful recovery. That is, if the lawsuit is lost, no repayment is required. For this reason, lawsuit loans are considered a “risk free” proposition for plaintiffs.

Contrasting lawsuit loans and personal loans boils down to when repayment is necessary. Personal loans imply repayment occur at some point in the future. Lawsuit loans however, are only repaid upon a recovery. Lawsuit loans are non-recourse, meaning lawsuit loan companies cannot pursue plaintiffs personally for repayment. Repayment is entirely dependent upon a lawsuit’s success.

The Lawsuit Loan Process

The lawsuit loan process is fairly simple. First, plaintiffs contact lawsuit lenders and apply for funding. Lenders then contact plaintiffs’ attorneys and request supporting documents. These documents are analyzed by lawsuit funding underwriters who will either approve or deny the request. When approved, lenders prepare a contract for signature by both the plaintiff and their counsel. Once executed and returned, the case is “funded” and money is sent via overnight courier or overnight transfer (EFT).

When Lawsuit Loans are Repaid

Lawsuit loans are repaid only after a case ends. This can happen through a court judgment, arbitration, or—most commonly—a settlement. Once the attorney receives the funds, they will deduct the lawsuit loan amount (plus fees and interest) before disbursing the remaining settlement to the client.

How the Repayment Process Works

Lawsuit loans are repaid summarily as follows:

  1. Settlement or Judgment: Your case concludes, and a settlement or award is issued.
  2. Attorney Receives Funds: The defendant or insurance company sends the settlement check to your lawyer.
  3. Attorney Deposits Funds: The attorney deposits the proceeds into an attorney trust account.
  4. Loan Payoff: Your attorney pays the lawsuit funding company directly from the settlement.
  5. Lien Payoff: The attorney pays off any other liens on the file. This often includes an attorney’s fee.
  6. Remainder to Client: After the loan and legal fees are paid, the remaining funds are released to the client.

What Costs Are Involved?

Lawsuit loan cost remains a major concern for most individuals considering legal funding as a financial solution. Lawsuit loans are repaid in amounts which calculate the following:

  • The original advance amount (amount client receives).
  • An interest rate, which can be either simple or compounded monthly.
  • Any processing, origination fees, and/or other fees.

Lawsuit loans are repaid generally according to a schedule which calculates the payoff depending upon how long it takes to resolve the case. Lawsuit loan best practices place this schedule on the first page of the contract. Accordingly, clients wishing to pursue funding would be wise to review the funding agreement carefully.

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

WE ARE HERE TO HELP YOU!

Can You Pay Back Early?

Lawsuit loans are repaid at the conclusion of the case. However, most lawsuit loan companies allow early repayment without penalties. This more often occurs when a plaintiff wishes to secure multiple lawsuit loans and another lender “pays off” the previous advance. This is so there is only one funding agreement attached to a case at any given time. This is preferred by most lenders but exceptions sometimes occur.

Most funding companies also allow plaintiffs themselves to repay the advance. This is more rare than what is described above but is still possible. If a case is moving faster than expected or a plaintiff comes into funds, they can ask the lawsuit lender if early repayment is an option.

What Happens If You Lose Your Case?

Remember, lawsuit loans are NOT repaid if the case is lost (no recovery). This is a main feature. Because these are non-recourse loans, you are not personally liable if your case doesn’t result in a settlement or award. You don’t need to repay the loan if there’s no recovery.

Final Thoughts

Lawsuit loans can provide essential financial support during a difficult time, but it’s crucial to understand how lawsuit loans are repaid before committing. Always read the terms, consult your attorney, and work with a reputable funding company. This is the primary reason why the Fair Rate Funding blog is so popular among our clients. Everything you need to know about lawsuit funding can be found on this website.

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.

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When individuals file lawsuits, they often face significant financial strain. Legal battles can take months or even years to resolve, leaving plaintiffs struggling to cover medical bills, living expenses, and other financial obligations. This is particularly true if plaintiffs are unable to work, sometimes due to accident injuries. This is where legal funding helps plaintiffs by providing a financial lifeline during the litigation process. In this post, we examine how legal funding helps plaintiffs endure the legal process and secure justice.

Legal funding, also known as lawsuit funding or pre-settlement funding, is a non-recourse cash advance provided to plaintiffs awaiting a settlement or court judgment. Unlike traditional loans, legal funding does not require monthly payments, and plaintiffs only repay the advance if they win their case.

Legal Funding Helps Plaintiffs

Although sometimes referred to as lawsuit loans, the differences between personal loans and lawsuit loans are many. First, traditional lending implies repayment at some point in the future. Legal funding however, is structured as a sale of future property rights in a lawsuit’s recovery. If the lawsuit is not successful, what is purchased (part of the recovery) is nothing. Thus, lawsuit loans are only repaid if a case is successful. A lawsuit “lender” cannot pursue a plaintiff personally for repayment under the terms of the agreement and under normal circumstances.

This unique nature provides a liquid market for plaintiffs to sell a portion of their recovery prior to receiving it. And in certain circumstances, makes legal funding a viable financial tool to alleviate immediate financial concerns.

Legal funding helps plaintiffs in various ways. These can include:

Covering Essential Living Expenses

Many plaintiffs are unable to work due to injuries or other case-related circumstances. Legal funding helps plaintiffs by covering rent, mortgage payments, utilities, groceries, and other necessities while they wait for a settlement.

Providing Relief from Medical Bills

Personal injury plaintiffs often face mounting medical costs. Legal funding helps plaintiffs afford necessary treatments, surgeries, and therapy without worrying about immediate out-of-pocket expenses.

Levels the Playing Field Against Insurers

Large corporations and insurance companies have the financial resources to delay settlements, hoping plaintiffs will accept low-ball settlement offers out of desperation. Legal funding helps plaintiffs hold out for a fair settlement by giving them the financial stability to continue their legal fight. With this cushion, their attorneys can do their jobs and secure just compensation.

Avoids Traditional Loan Requirements

Traditional loans often require income and/or asset verification and employment. Many plaintiffs simply cannot qualify for traditional lending solutions. Without legal funding, some plaintiffs resort to unsecured debt transactions such as high-interest credit cards or personal loans to stay afloat. Legal funding helps plaintiffs avoid these costly alternatives, as repayment is only required if they win their case.

Lawsuits are stressful, especially when financial hardship is involved. They also take time as legal system delays are inherent in the process. This is especially true when lawsuits involve severe injuries which make cases more complex. Legal funding helps plaintiffs focus on their recovery and case without constantly worrying about bills and expenses.

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

WE ARE HERE TO HELP YOU!

Legal funding is available to plaintiffs involved in various types of cases, including:

  • Personal injury lawsuits
  • Wrongful death claims
  • Employment disputes
  • Medical malpractice cases
  • Product liability lawsuits

In fact, most plaintiffs who are represented by attorneys on a contingency fee basis (they earn a legal fee based upon a successful outcome) can apply for lawsuit loans. Eligibility is primarily based on the strength of the case, not the plaintiff’s credit score or income. This is because funders invest on the case’s outcome, not the plaintiff’s ability to repay.

The lawsuit loan process is simple:

  1. Submit an application – Plaintiffs provide basic case details to a live lawsuit loan representative who screens the applicant and takes down basic information.
  2. The Paper Chase – Once pre-qualified, documents are requested from the plaintiff’s counsel.
  3. Attorney cooperation – Legal funding helps plaintiffs the best when their attorneys participate in the process. In fact, attorney cooperation in lawsuit funding is required. The funding company reviews case documents with the plaintiff’s lawyer.
  4. Approval and funding – When approved, a contract is drafted and sent to the applicant. Upon receipt, funds are sent quickly—often within 24-48 hours.

Legal funding helps plaintiffs by providing crucial financial support during litigation. Whether covering daily expenses, medical bills, or enabling plaintiffs to reject low-ball settlement offers, lawsuit funding ensures justice isn’t compromised by financial hardship. If you’re involved in a lawsuit and need financial assistance, exploring legal funding options can be a game-changer in your pursuit of fair compensation.

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.

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Legal funding agreements are a financial tool for plaintiffs who need financial support while awaiting the resolution of their lawsuits. These agreements allow individuals to secure immediate funds in exchange for a portion of their future legal settlement or judgment. In this post, we examine the structure, terms, and considerations involved in legal funding agreements, providing the necessary information needed to see whether this option is a possible solution for any particular situation.

Legal funding agreements are contracts between plaintiffs and legal funding companies. Also known as “lawsuit loans”, companies provide cash to cover immediate financial concerns. Plaintiffs pledge a portion of their potential recovery in return. Unlike traditional loans, legal funding is non-recourse, meaning if plaintiffs lose, no repayment is required under the contract.

Legal funding agreements contain a myriad of clauses and terms. The most important of which are listed below. Understanding these key terms is crucial to making an informed decision when considering a lawsuit loan:

Legal Funding Agreements

Contract Amount

This is the sum of money that a plaintiff agrees to accept in return for the cash. Lawsuit loan contracts are designed as a partial sale of property rights in the proceeds. For this reason, the words “purchase price” are often used to describe the transaction. It is typically based on the estimated settlement/recovery value of the lawsuit.

Funding Fee

Legal funding agreements often refer to funding fees as lawsuit loan rates or service fees. This is the agreement’s cost to the plaintiff. Funding payoffs increase over time. The longer the case lasts, the higher the payoff will be. Keep in mind lawsuit funding companies calculate payoffs differently. Some use a “simple interest” calculation. Others compound the rate monthly. Accordingly, plaintiffs should take some time learning the differences between simple and compound lawsuit loan rates.

Repayment Conditions

Legal funding agreements specify that repayment is contingent upon a favorable case outcome. If the case is unsuccessful, no repayment is required. If there is a recovery, the money usually flows from the defendant (insurance company) to the attorney’s trust account. From the trust account, attorneys will repay any legal funding and other liens.

Lien or Security Interest

In certain instances, funding companies place a formal lien on the lawsuit proceeds to secure their interest. These might include a Uniform Commercial Code (UCC) filing or something similar. In the majority of cases, attorneys are instructed to place the legal funding agreement in the file for payment upon disbursement.

Disbursement Process

This outlines how the funds will be provided to the plaintiff, including timelines and any necessary legal documentation.

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

WE ARE HERE TO HELP YOU!

Benefits

Lawsuit loans offer plaintiffs a potential solution to their cash flow issues. They offer the following advantages:

  • Immediate Financial Relief: They provide immediate funds for living expenses, medical bills, and legal fees.
  • Risk-Free Repayment: Non-recourse terms protect plaintiffs from additional debt if their case is lost.
  • Stronger Negotiation Position: Financial support can reduce pressure to settle early for less than the case’s true value.
  • No Credit or Employment Checks: Legal funding depends upon the merits of a particular case. The plaintiff’s creditworthiness is not relevant since lawsuit loans are not personal loans.
  • Simple Application and Approval Processes: Applicants are often surprised at the ease in which their cases are approved for funding. Funding companies understand that speed is an important issue. They strive to provide funding in the quickest manner possible. Many clients receive funds the same day.

Potential Drawbacks

There are other things to consider however. Legal funding agreements are not typical loan products. These specialty financial products differ from traditional lending and the following outcomes should be understood:

  • High Costs: Accruing fees can significantly reduce the plaintiff’s final settlement amount.
  • Complex Terms: Misunderstanding contract details may lead to unexpected obligations.
  • Limited Availability: Not all lawsuits are potential candidates for legal funding. Click on the link for a list of lawsuit loan case types.
  • Reduction in Amount Ultimately Received: Lawsuit loans must be repaid from the proceeds under legal funding agreements.
  • Unregulated: Legal funding generally exists in an unregulated marketplace. Companies can charge whatever they wish for their services. Shopping for the best lawsuit loans can be a challenging endeavor for some.
  • Attorney Participation: Most funding arrangements require that an attorney be retained and then he/she sign off on the agreement.

Legal funding agreements can be a valuable resource for plaintiffs facing financial hardship during prolonged legal battles. By carefully reviewing the terms and consulting with legal counsel, individuals can make informed decisions that align with their financial needs and case strategy. Understanding the intricacies of legal funding agreements is key to leveraging this financial tool effectively.

Thank you for your interest in Fair Rate Funding.

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Lawsuit Loans Help Your Lawsuit – Here’s How

Engaging in a lawsuit can be both emotionally and financially draining. For plaintiffs facing mounting bills and daily expenses, lawsuit loans offer a financial bridge to ease the pressure. These loans can provide significant benefits, particularly when used strategically. In this post, we explore how lawsuit loans help your lawsuit and why they are worth considering.

Reduces Financial Pressure During Litigation

One of the most immediate ways lawsuit loans help your lawsuit is by alleviating the financial stress of everyday expenses. When you’re waiting for your case to settle, bills like rent, utilities, or medical costs don’t stop. A lawsuit loan gives you the financial breathing room to focus on your case rather than worrying about how to make ends meet.

Lawsuit Loan Basics

Lawsuit loans, also known as legal funding or pre-settlement advances are financial transactions where plaintiffs sell a portion of their recovery ahead of time. They are used most often in civil litigation where legal system delays result in many months or even years to elapse before plaintiffs receive compensation.

Unique Lawsuit Loan Structure

Lawsuit loans are structured as a sale of future property rights and as such are not actually loans in the traditional sense. While traditional lending requires repayment (with interest) at some point in the future, lawsuit loan repayment is entirely dependent upon a successful outcome. In other words, if a lawsuit fails, lawsuit loans are not repaid.

According to the terms of most lawsuit loan contracts, repayment must come from the settlement proceeds themselves. Thus, they are often referred to as non-recourse funding – meaning lawsuit lenders have no recourse against plaintiffs personally. Plaintiffs who receive lawsuit funding and later lose their lawsuit are not responsible for repayment.

This structure ensures that plaintiffs aren’t burdened with additional debt if their case doesn’t go as planned, making it a relatively low-risk option for those in need.

Lawsuit Loan Purpose

Lawsuit loans help plaintiffs pay their expenses while their cases matriculate through the legal process. They are often used to pay living or other expenses while cases progress. This way, plaintiffs can resist accepting low-ball settlement offers due to personal financial trouble.

How Lawsuit Loans Help Your Lawsuit

Lawsuit loans benefit plaintiffs with immediate cash flow. However, lawsuit loans can help your lawsuit as well. Below are the top ways lawsuit loans help your lawsuit:

Reduces Financial Pressure During Litigation

One of the most immediate ways lawsuit loans help your lawsuit is by alleviating the financial stress of everyday expenses. When you’re waiting for your case to settle, bills like rent, utilities, or medical costs don’t stop. A lawsuit loan gives you the financial breathing room to focus on your case rather than worrying about how to make ends meet.

Allow Time for a Fair Settlement

Defendants and insurance companies often exploit plaintiffs’ financial hardships by offering low-ball settlements. Lawsuit loans help your lawsuit because you can afford to wait for a settlement that reflects the true value of your claim. This ability to hold out can often lead to a significantly higher payout.

Your legal team may need time to build a compelling case, gather evidence, and negotiate effectively. Lawsuit loans help your lawsuit by ensuring you don’t rush the process out of financial desperation. With less pressure to settle quickly, your attorneys can pursue the best possible outcome for your case.

In some cases, plaintiffs use lawsuit loans to cover litigation costs, such as expert witnesses, depositions, or court fees. Investing in these elements can strengthen your case, increasing the likelihood of a favorable outcome. By providing the resources you need to present a strong argument, lawsuit loans help your lawsuit directly.

Medical Treatment and Expenses

Lawsuit loans help your lawsuit when used to pay for medical treatment and surgery costs. Accident victims often require extensive medical treatment. Diagnostic testing, surgical intervention, physical therapy, and rehabilitation can be expensive, especially for serious injuries. Some injured plaintiffs compile hundreds of thousands of dollars in medical debt.

Medical costs can be paid with lawsuit loan advances after treatment but also can be paid up-front with programs known as surgery lawsuit loans. Surgical lawsuit funding negotiates an up-front fee for surgery and pays the provider directly. When the case is resolved, the cost for the surgery is repaid. When surgery is not offered under a letter of protection, lawsuit loans can help your lawsuit by paying for necessary surgical procedures at the time of treatment.

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

WE ARE HERE TO HELP YOU!

Who Can Benefit Most from Lawsuit Loans?

While there are many lawsuit loan case types, these transactions are particularly helpful for plaintiffs involved in lawsuits such as:

  • Personal injury
  • Medical malpractice
  • Wrongful death
  • Employment disputes

This is because the above case types often involve a reduction or elimination of incoming household revenues. Personal injury accidents may prohibit plaintiffs from working as they did before the accident. Likewise, wrongful employment cases can reduce a plaintiff’s income. Lawsuit loans help your lawsuit by helping you with financial support.

Tips for Choosing a Reputable Lawsuit Loan Provider

Reputable lawsuit loan companies are transparent with their terms and conditions. Fortunately, shopping for lawsuits has never been easier. Look for lenders with transparent terms and competitive rates. You can also search a lender’s Better Business Bureau profile for more information.

You can also consult your attorney to make sure your case is a viable case for lawsuit funding solutions. Many attorneys have working relationships with lawsuit lenders. This can aid in the search and offer the most competitive terms available.

Finally, make sure you’re clear on repayment obligations and potential costs. Virtually all you need to know about lawsuit loans is discussed in our lawsuit loan blog articles. If you cannot find the answer you are looking for, simply give us a call or contact us online. A live lawsuit loan representative will be happy to assist you.

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.

Conclusion

For many plaintiffs, lawsuit loans help their lawsuit by providing the financial stability needed to pursue justice without compromising their daily lives. While these loans should be used carefully and as a last resort, they can be a powerful tool to level the playing field against well-funded defendants.

By choosing the right lender and using the funds strategically, lawsuit loans can be an asset in securing a fair and favorable settlement.

Thank you for your interest in Fair Rate Funding.

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What are Lawsuit Loans? – Asked and Answered

Many people are curious about what lawsuit loans are and how they differ from traditional loans. Essentially, a lawsuit loan is a cash advance for plaintiffs expecting a settlement. The loan is secured against the potential future settlement, and repayment is only required if the plaintiff wins or settles the case. In this post, we explore the question: “What are lawsuit loans?”. We uncover what lawsuit loans are, how they work, their pros and cons, key factors to consider, and offer insights as to their use.

Understanding What Are Lawsuit Loans

What are Lawsuit Loans

A lawsuit loan, also known as legal funding or pre-settlement funding, is a cash advance provided to plaintiffs involved in pending lawsuits. Lawsuit loans are not loans in the traditional sense since repayment only occurs if the case is successful. Instead, they are a partial sale of the lawsuit’s future recovery. Because of this, lawsuit funding companies cannot pursue plaintiffs personally for repayment. Repayment must come from the settlement proceeds themselves. If the case is lost, no repayment is due.

Settlement loans are most commonly used in personal injury cases, including automobile accidents, medical malpractice, and workers’ compensation claims in some states. They provide financial relief to plaintiffs who need money for daily expenses, medical bills, or other urgent costs while their legal cases progress.

How They Work

The lawsuit loan process generally progresses through the following steps:

  1. Application: Plaintiffs apply for funding through a pre-settlement funding “lender”. The application process involves providing information about the case and the attorney handling it.
  2. Case Evaluation: The lender reviews the case details, focusing on its strength, potential settlement amount, and expected time frame. Unlike traditional loans, credit history or income levels are not key factors for approval.
  3. Approval and Offer: If lenders see the case’s potential, an offer is made. How much funding is available depends on the estimated value of the case and other factors. The amount offered is usually a fraction of the anticipated settlement value. A general rule of thumb is 10-15% of the case’s prospective settlement value, if the case were to settle immediately.
  4. Repayment: If the plaintiff wins or settles the case, the lender is repaid from the proceeds and in accordance with the lawsuit loan contract. If the case is lost, the plaintiff owes nothing.

This non-recourse feature makes legal funding unique, as they pose a lower financial risk to plaintiffs compared lawsuit loan alternatives.

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

WE ARE HERE TO HELP YOU!

Understanding the pros and cons of pre-settlement funding also helps understand what they are. When considering a lawsuit loan, plaintiffs benefit from weighing the benefits and drawbacks to make an informed decision. Lawsuit loan benefits include:

  • Immediate Financial Relief – Legal funding provides immediate cash, which are normally used to cover living expenses, medical bills, or other expenditures during the lengthy litigation process.
  • No Credit Checks – Credit scores are irrelevant for pre-settlement funding approvals. Access to legal funding is based on the case’s merits of the case, not the plaintiff’s credit score or income. Thus, plaintiffs who might not qualify for personal loans can still obtain lawsuit funding.
  • Non-Recourse: If the lawsuit yields no recovery, no repayment is made. This makes lawsuit loans a risk free option for plaintiffs.

Lawsuit loan critics point to multiple problems. These include potentially high costs associated with the additional risk lawsuit lenders assume in the transaction. Lawsuit loan rate structures can vary but most reputable lawsuit funding companies will charge 18% every six-months after the advance date. Lawsuit loan fees can also contribute to the final repayment amount.

While costs are generally higher than personal loans, legal funding offers a specialty marketplace in which plaintiffs can sell a portion of their lawsuit prior to recovery. This service has risk and is priced accordingly. Characterizing lawsuit loans as predatory simply mislabels the free market’s response to plaintiffs’ legitimate needs.

What Are the Lawsuit Loan Requirements?

To qualify for a pre-settlement funding, plaintiffs typically need to meet several requirements:

  • Active Legal Case: You must have an ongoing lawsuit with a potential for monetary compensation.
  • Attorney Representation: An attorney must be handling your case, usually on a contingency fee basis (i.e., they get paid only if the case wins).
  • Strong Case Merits: The case needs to show a reasonable chance of success, as this determines the lender’s willingness to provide funding.

Types of Lawsuit Loans

Pre-settlement funding comes in several varieties, each catering to different legal needs:

  • Plaintiff Pre-Settlement Funding: This is the most common type, providing cash advances while the case is ongoing. The money is repaid if the case ends favorably.
  • Plaintiff Post-Settlement Funding: For plaintiffs who have already reached a settlement but are waiting for the payout, post-settlement funding provides a bridge loan.
  • Attorney Funding: This type supports law firms working on contingency, helping them cover costs related to case preparation.

Is a Lawsuit Loan Right for You?

Lawsuit loans are financial tools designed to help plaintiffs manage expenses during the course of a legal case. They offer significant benefits by providing non-recourse funds but come with high costs that can affect the final settlement amount. Understanding what legal funding is, how it operates, and what factors to consider can help you make a sound decision tailored to your financial needs during a legal battle.

Deciding whether to take a lawsuit loan requires a careful assessment of your financial situation and case prospects. If you have any questions regarding pre-settlement funding, give us a call at 888-964-2224. A live lawsuit loan representative will pick up the phone and answer all your questions.

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

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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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Settlement Funding Buyouts Show Flexibility

Often, clients receive lawsuit funding and later need more money than their original lawsuit cash advance.  Lawsuit funding companies usually give more money to a plaintiff/client with a strong enough case to justify the additional risk.  But the determination is subjective.  That is, the lawsuit funding company can simply refuse to advance any more money on the case.

When this occurs, the client has a choice to make.  Either they find another source of money outside the lawsuit funding arena, or they find another settlement loan outfit to advance them more money.

Settlement funding buyouts are an option for plaintiffs who’ve receive funding before, require additional funds, and the original funding company denies the application for more money. In this post, we examine settlement funding buyouts and their effects.

What are Settlement Funding Buyouts?

Most lawsuit loan contracts require any subsequent lawsuit “lender” repay a previous lawsuit loan prior to advancing additional funds on a particular case. A lawsuit loan buyout is when a second settlement loan company pays the original company in full and advances more money to the client.  The advance is “re-financed” because the plaintiff now must repay only the second lawsuit lender.

Lawsuit Funding Buyouts
Lawsuit Funding

At Fair Rate Funding, lawsuit funding applicants routinely apply for additional funding after an initial lawsuit loan is received.  If the applicant received lawsuit funding from another company, we call these cases “buyouts”.  This term is used because in order for a lawsuit funding applicant to receive additional funds, the prior advance must be paid in full by the “new” settlement funding company.  This is because the second funding company does not want to be second in line when it comes time to repay the advance. 

Settlement funding buyouts can be tricky since lawsuit lenders will only advance a certain amount of money on a case.  That amount is normally 8-12% of the estimated settlement value of the lawsuit.  If the prior funding “payoff” is at or near this amount, no additional funding is generally offered.

The Benefits of Settlement Funding Buyouts

Settlement loan buyouts occur every day.  And these transactions can actually benefit plaintiffs.

Consider a plaintiff who signs a $10,000 lawsuit funding agreement which calculates the “use fee” (interest) at 3.25% per month compounding monthly.  The nature of this rate structure is to lower the repayment amount in the first year and a half of the contract term.  In other words, the payoff for these contracts would be cheaper for the client if the contract were to settle in the first 18 months after the advance.

Due to unforeseen circumstances, the client learns his case is several years away from getting a trial date.  There could be many reasons for legal system delays, but what is important to realize is that the longer the case drags on, the more the settlement loan costs.  Because the percentage charge is calculated on the previous month’s balance, the higher balance generates a higher payoff amount.  This is known as a “compounding effect”.

Contrast this to a fixed six (6) month “use fee” structure where the charge is calculated on the original contract amount and not the previous month’s balance.  The “charge” for the use of the money remains the same at the end of the case as it did at the beginning.  In this situation, the client may be far better off “refinancing” his existing advance with a lawsuit funding with a different lawsuit loan rate structure.

By comparing simple v. compounding rates with lawsuit loans, you can see that settlement buyout benefit clients by locking in an use fee that is non-compounding.  Clients get more money before the case is concluded and pre-settlement funding companies get “fundable lawsuits” to invest in.

Lawsuit Funding Flexibility Allows for Creative Solutions

Lawsuit loan flexibility meets clients’ particular needs because there are no hard and fast rules (regulations) stating what two free market participants can do when they enter into a contract (lawsuit funding agreement).  As such, funding structures such as buyouts, monthly stipends, and flexible repayment terms all afford plaintiffs the ability to tailor the transaction to suit his/her needs.

For More Information

To learn more about the unique nature of the lawsuit funding business, you can access the library of articles on the Fair Rate Funding Blog. You can also visit our Frequently Asked Questions page.

Or, you can simply give us a call or contact us online. A live representative will answer/contact you and answer any questions you might have.

Why Choose Fair Rate Funding

You obviously have a choice in who you use for legal funding. We’ve been in the legal funding business since 2007 and offer:

  • Simple and Easy Process – Approval only on 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 settlement funding buyouts and the lawsuit funding business.

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An 87 year old California man recently filed a product liability lawsuit against Janseen Research and Development and Bayer Healthcare after suffering serious side-effects from the use of their drug, Xarelto.

Product-Liability-Settlement-Funding
Product-Liability-Settlement-Funding

The unnamed plaintiff filed the lawsuit on October 9, 2014, in the United States District Court, Northern District of California. The plaintiff seeks compensation for severe and lasting personal injury, physical and mental pain and suffering, medical bills, and legal fees. In total, the lawsuit claims $10 million in damages.

The plaintiff was ordered by his doctor to take Xarelto, a powerful anticoagulant, in 2012. After beginning treatment with the drug, the plaintiff suffered a gastrointestinal bleed. His lawsuit claims the injuries were directly caused by his use of Xarelto.

Xarelto is one of the highest selling anti-coagulants on the multi-billion dollar market. Links between Xarelto and related medical issues are well documented. This lawsuit is far from the first to be levied against the drug manufacturers. Many plaintiffs in these cases experienced a long fight while only a slim percentage have seen any monetary relief.

Product liability lawsuit can be extremely lengthy and difficult, often taking several years to reach a conclusion and costing plaintiffs significant sums in legal fees over the course of their duration. The parent companies of the products in question are heavily invested in the defense of their assets, and will expend every possible effort to prolong the eventual payout or absolve themselves from responsibility.

But while companies like Bayer and Janseen have their own legal departments and resources to empower their legal battles, plaintiffs are far from powerless. Several legal resources exist to help plaintiffs ‘stay the course’ and realize better settlements, one of which is product liability settlement funding.

Product Liability Settlement Funding Gives Cash Now to Plaintiffs

Settlement funding, or lawsuit funding, provides plaintiffs in lawsuits with a cash advance to help them weather the financial burden of a protracted court proceeding. And as product liability settlement funding is not a traditional loan, current employment and credit history are not factors in the underwriting. Unlike a traditional loan, the only concern for a settlement funding lender is the likelihood of a successful outcome.

Securing product liability settlement funding requires no upfront fees or incremental payments. A cash advance can be made available in as little as 24-hours, once the determination has been made to provide a plaintiff with settlement funding.

And unlike traditional loans with monthly payments, the “borrower” of settlement funding is not required to pay anything until settlement is reached or judgment rendered. Should the plaintiff receive monetary compensation; the “lawsuit loan” payment is taken right out of the settlement.
Should the plaintiff lose the case, they are not required to pay anything, including the original advance amount.

For those involved in a product liability lawsuit, securing settlement funding could help to hold-out and receive a better judgment or settlement. A product liability lawsuit can be a very long and trying process; keep up the fight with product liability settlement funding.

https://injurylawyer-news.com/2014/10/california-man-sues-xarelto-bleeding-injuries/

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A wrongful death lawsuit centering around the death of an iron worker who lost his life in a construction accident on the Northwestern University campus in Chicago, Illinois is moving ahead.

Wrongful-Death-Lawsuit-Funding
Wrongful-Death-Lawsuit-Funding

57-year-old iron worker, Michael Kerr, was perished on May 16, 2013. A construction crane knocked a 16-foot, 70 lb beam from the sixth story of a new building being constructed on the campus grounds. Kerr was on the ground level when the beam crashed onto his head and chest. Two hours later, Kerr was pronounced dead at the Evanston Hospital.

In response to the accident, Kerr’s son filed a wrongful death lawsuit against the general contractor managing construction at the location, Power Construction. “Far too many workers are killed in construction accidents,” said Robert Briskman, a Chicago construction accident attorney. “If the contractor was negligent, then a wrongful death lawsuit is appropriate to gain compensation for the family.”

Kerr’s son and family are seeking $200,000 in damages from the construction firm. According to allegation made in the lawsuit, Power Construction was negligent in failing to follow and maintain proper safety precautions on site, including thoroughly inspecting the work environment and securing all construction materials.

In addition generating the wrongful death lawsuit, the accident has led the Occupational Safety and Health Administration (OSHA) to conduct an investigation into the incident seeking to uncover any failure to maintain OSHA safety regulations. In November, OSHA issued a citation to Power Construction stating Power Construction failed to protect subcontractor workers from harm. As a result, the company was ordered to pay $7,000 in fines and conduct training to prevent future incidents.

Despite this citation, a finding against Power Construction in the ongoing wrongful death lawsuit is in no way assured. Power Construction may be able to free itself of responsibility in the civil case despite OSHA’s ruling.

https://www.lawfirmnewswire.com/2014/09/lawsuit-continues-over-illinois-construction-workers-death/

Even if the lawsuit is not dismissed, there is always the possibility they may be able to convince Kerr’s family to settle for a lesser amount. As expenses begin to add up, Kerr’s family maybe begin to see this as an attractive option. Securing lawsuit funding, however, could provide them with the financial leverage to reject an unsatisfactory offer.

Lawsuit Funding Helps Illinois Litigants with Wrongful Death Lawsuits

Lawsuit funding provides cash advances to plaintiffs involved in civil proceedings in order to help them shoulder the financial hardships of an extended court battle. And as lawsuit funding is not a traditional loan, factors such as employment or credit history are not factored into funding considerations. The likelihood of a successful case is the only concern.

Securing wrongful death lawsuit funding requires no upfront fees or incremental payments. A lawsuit cash advance can be made available in as little as 24-hours.

And unlike traditional loans with monthly payments, the borrower of wrongful death lawsuit funding is not required to pay anything until a judgment is rendered. Should the plaintiff receive the desired outcome, the lawsuit loan repayment is taken right out of the winnings.

On the other hand, should the plaintiff lose the case, they are not required to pay anything, not even the money borrowed.

For those involved in wrongful death lawsuits, securing lawsuit funding could help to realize a better judgment or settlement. Fighting to receive a fair judgment in a wrongful death lawsuit can be a long and trying process; empower your fight with lawsuit funding.

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On September 27, 2012, 12-year-old Hailey Ratliff rode her bicycle home from Sinaloa Middle School in Novato California when she was struck and killed by a motorist. Ratliff’s family filed suit against both the driver and the City of Novato. The case continued until 2014, when it was recently settled for over $1 million.

Wrongful-Death-Lawsuit-Funding
Wrongful-Death-Lawsuit-Funding

The majority of the settlement, some $800,000 is to be paid by Tait North America, the employer of the at fault driver, and by Morningstar Farms, a horse ranch near the site of the accident. An additional $320,000 is to be paid by the city of Novato, the majority of which will be covered by the town’s insurance. In total, the settlement amount comes to $1.12 million.

This large amount, however, is of little comfort to Ratliff’s mother, Angela, who reportedly stated that, “the lawsuit was never about money, the lawsuit is about change.”

The driver of the vehicle, one Samuel Lee Boulware Jr. of Houston, Texas, was speeding and driving recklessly at the time of the accident, according to the claims made in the lawsuit. Boulware was driving a rented GMC Yukon when he collided with Ratliff on Navato Boulevard.

While the lawsuit holds the driver responsible for the crash, it also alleged liability on the City of Novato. The family has insisted that, as part of the settlement, the city of Novato must undertake a full and comprehensive review of speed limits and pedestrian safety along the stretch of road where Ratliff was struck, claiming the adjacent neighborhood offers no easy foot access.

“I refuse to let our daughter’s death be in vain and somebody needs to do something,” said Ratliffs mother.

Ratliff’s family had recently moved to Novato. In the outpouring of community grief and support that followed the incident, many area families agreed the road conditions where the girl was hit are an unacceptable danger to pedestrians.

While Ratliff’s family was able to realize a fair settlement, nothing will undo the hurt of losing a daughter. Wrongful death lawsuits are exceptionally hard on a family, and when the defendant is a municipality, the court battle can be especially taxing. As court proceedings drag on, monthly expenses continue to mount, many plaintiffs in wrongful death suits feel pressured to settle out of court for lesser awards. In such cases, securing lawsuit funding could help plaintiffs hold out against the pressure.

Wrongful Death Lawsuit Funding Holds the Key

Wrongful death lawsuit funding provides a cash advance on the expected proceeds of a wrongful death lawsuit. This money allows plaintiffs to withstand the delay and realize a better settlement.

For plaintiffs, wrongful death  lawsuit funding could help them hold out for a just compensation. With bills paid and the pressure to settle quickly taken off of their shoulders, plaintiffs have the monetary support to hold out for fair compensation.

Money from wrongful death lawsuit funding can be made available in as little as 24-hours. There are zero upfront fees involved in securing settlement funding. And unlike traditional loans with monthly payments, the borrower is not required to make payment unless the case is settled or judgment rendered. If the plaintiff receives compensation, the lawsuit loan payment is made through the settlement. If the plaintiff loses the case, no repayment is required.

If you are going through a wrongful death lawsuit and are feeling the pressure to settle, acquiring settlement funding can go a long way toward helping you realize fair compensation. Your loss is painful enough – let Fair Rate funding take some of the hurt out of your court proceeding with settlement funding.

https://www.ktvu.com/news/news/crime-law/family-novato-girl-killed-car-accident-settles-wro/nhYF5/

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