Currently there are many options for a plaintiff involved in litigation to secure funds required to finance lawsuits. One such way is the lawsuit loan which is a form of pre-settlement lawsuit funding. Technically this is not a loan but more of an advance fee, investment or venture capital. Generally only lawyers and law firms are eligible for actual loans or lines of credit to finance lawsuits while a plaintiff in a personal injury case is offered a no-recourse lawsuit funding
A lawsuit loan enables a plaintiff involved in a personal injury lawsuit to obtain a cash advance against the verdict or settlement. The primary advantage of this type of arrangement is that it carries no risk to the plaintiff. If the defendant wins and there is no recovery at all or if the lawsuit settles for less than the cash advance, the plaintiff has no bindings to the lawsuit funding company other than his own share of any recovery.
There are other ways of finding the funds required to fight a case besides a lawsuit loan. The plaintiff may take recourse to other kinds of loans such as a personal loan or line of credit or borrow money from friends and family. If the plaintiff has equity on his home, he can even take out a home equity loan or a second mortgage on his home. In some cases, it may be more economical to utilize the maximum limit of the credit card than to obtain a loan from a lawsuit financing company.
The primary disadvantage of a lawsuit loan is that it may be very expensive as their costs are structured to avoid the laws of usury. The option thus should be kept as a last resort of financing lawsuits. However, in some cases, a plaintiff is left with no other sources of capital and he must continue to pay medical bills, pay the rent or mortgage or even buy the basic necessities of life like food. In such cases, taking out a loan for lawsuit becomes imperative.
At present there are a large number of online financial companies which offer lawsuit loan to those in need. Among them are preferredcapitallending.com, 1stchoicefunding.com, easylawsuitfunding.com and others. Some of the financial companies which offer such loans are Beacon Legal Finance, National Lawsuit Funding, Oasis Legal Finance and Cap Tran. Besides these there are sites like thefundingexchange.com which take an application form from a customer online and send them to all lawsuit financing companies to enable the borrower to compare and decide.
Lawsuit companies generally finance up to 10-15% of the potential settlement value. However, before taking out a lawsuit loan a plaintiff must always be careful to go through the fine print and even better, involve his attorney in the process. This will not only enable to find him a lawsuit funding company offering the best terms but also review the contract with that company according to the plaintiffs best interests.
Expertlaw
