The Best Pre-Settlement Funding Companies
Understanding Lawsuit Funding
Lawsuit funding, often referred to as pre-settlement funding or a lawsuit loan, is a financial service provided to plaintiffs awaiting a court decision or settlement in a legal case. It is essentially a cash advance against the future settlement award or judgment obtained from the legal action. These advances provide immediate monetary relief enabling individuals to manage their living expenses and legal costs while their case is ongoing.
Pre-settlement funding is not a loan in the traditional sense. It is classified as non-recourse funding, which means that individuals are only required to repay the advance if they win their case. If the case is lost, they owe nothing.
Interest rate and rates structure in lawsuit funding varies significantly among companies. They can be flat fees or compound, and it’s crucial for plaintiffs to understand how the interest accumulates over time.
Here’s a brief outline to consider when evaluating lawsuit funding options:
- Rates: Understand the fee structure, whether simple or compound, and how rates accrue over time.
- Contract Terms: Scrutinize all terms in the agreement for clarity and ensure a thorough understanding.
- Company Reputation: Research the funding company’s history, customer reviews, and any legal or regulatory actions against them.
- Repayment: Confirm the non-recourse nature of the funding and the specific conditions under which repayment is required.
Plaintiffs often turn to legal funding companies to secure these advances, and it’s advisable to compare different lawsuit funding companies to find the most reasonable rates and terms. One should be confident that they are making an informed decision by considering every angle of the financial implications of pre-settlement funding.