After filing a personal injury lawsuit, you may soon realize that it’s affecting your finances. You will not only have to pay for your legal expenses, but you will also have to take care of your own medical bills and household expenses (rent, food, transportation, etc.) using your own money. Pretty soon, you won’t have any cash left and you’ll be in dire financial straits. Fortunately, you have the option of resorting to lawsuit loans.
With this type of loan, you are essentially borrowing money against the settlement or judgment that you are expecting from the lawsuit you filed. Many victims of personal injury and similar cases apply for lawsuit loans because they don’t have money to pay for your large medical bills as a result of the injury they incurred. They also use the money to cover living expenses, loans and legal expenses.
Are You Qualified for Lawsuit Loans?
The fact of the matter is that a lending company that specializes in settlement advance loans take a substantial risk every time they grant this type of loan to a plaintiff. As such, it will only lend you the money you need if it’s very confident that you have a good case. They will contact your lawyer and ask them as much information about your lawsuit, and the processing time may take a while as well.
Lawsuit advance lenders require applicants to have suffered personal injury, with approval from their lawyers. You also need to have a lien to your case, signed by you and your lawyer stating that you will pay them back once your case is settled or won.
How Much Will It Cost?
It depends on several factors but generally speaking, it’s more expensive than other types of loans. But that’s mainly because this kind of loan carries high risks to the lender. That’s because a lawsuit could go either way and you, as the plaintiff (and borrower) do not have any obligation to the lender in case the settlement amount is lower than anticipated or if there’s no settlement at all. In addition, it takes a long time for a personal injury case to settle or go to trial. This is why the interest rates are much higher for such loans. It could go anywhere from 25-60% per year depending on which lawsuit cash advance provider you approach. So, the longer your case drags on, the more money you will be paying. In most cases, you will only pay if and when you win or settle your case.
Other Options for Funding
Lawsuit loans are often considered the last option. Only when you have exhausted other means to obtain financing should you consider applying for this type of loan. Ask your family and friends if they can lend you money while you wait for your case to be settled or go to trial. You can also check with your credit union or bank if they can grant you a personal loan.