Lawsuit loans are used to describe a pre-settlement loan that is actually not a loan at all, it is more so an advancement fee. Lawsuit loans are used to assist those who have poor credit, are looking at foreclosure or are in some way needing immediate funds. The “fast cash” may be necessary but usually comes at a very high price. The interest rates attached to the loan are sometimes unconscionable.
During a personal injury case, many people are worried about their health and depending on how severe their injuries are many are becoming very stacked up with debt. For some people, there is no place to turn except to take out a lawsuit loan to cover bills.
Lawsuit loans derive from settlement companies and are based on the amount one assumes they will be awarded once your case has been finalized. A lawsuit loan is just like an actual loan, the same process is done; however there are no monthly payments and the payment due to the settlement company is taken from the final settlement issued to you.
There is always worry about not being able to pay the amount back because the case did not go their way. Many worry that they will be looking at even more debt than they were before. This is not the case because lawsuit loans are non-recourse loans this means if your case is not in your favor than the loan does not have to be paid back.
Most people have already gotten a lawyer while pursuing a personal injury case, however if you have not obtained a lawyer than now would be as good a chance as any. So first, get yourself a lawyer. If funds are needed right away then look to your lawyer for help. A lawyer can send documentation to a settlement company who will review the information. You will find out the same day whether or not you can receive a lawsuit loan and should be paid on the following day.
Many may ask their lawyer if they can lend them money. This is not an option as it violates state ethical rules; at least in California.
Lawsuit loans are helpful in some of the harshest situations but can be hard to obtain sometimes. If you are finding trouble while seeking a lawsuit loan it might be a good idea to look into other resources such as a bank loan as the interest rate is much more reasonable. Don’t forget to read the find print and ask the lender to detail the full interest rate payment assuming you borrow the money for the full term.
