Lawsuit financing is usually misunderstood as loans. In reality lawsuit finances or lawsuit funds are advances or investments made to avoid state laws against making excessive charges of interest. These lawsuit finances are available for appellate funding, attorney funding, expert witnesses and plaintiffs. Lawsuit finance helps those who have lost their jobs, have met with accidents, had personal injuries, faced sexual harassment, or are charged with malpractice.
A lawsuit loan, also known as a settlement loan, or pre-settlement funding is a form of financing that an individual can apply for prior to the proceedings of a lawsuit they’re filing. When someone gets injured on the job or wishes to sue a company, business or individual, a lawsuit loan can help them get the funding they need to either deal with the costs of the legal proceedings or help keep them financially stable during the length of the case. After all, it’s likely that someone pursuing a lawsuit has been injured and is no longer able to work as a result. Even if they’re able to receive unemployment or disability insurance, it might not be enough for them to get by. This is where a lawsuit loan can help.
When clients sometimes cannot even meet their basic requirements like rent and expenses, lawsuit financing helps them. Under such cases the lawsuit financing companies help by providing advances to the clients. Lawsuit finance is non-recourse in nature. Unlike a loan it is retrieved by the lawsuit financing company only when the verdict is in favor of the client. The lawsuit financing company can claim for the settlement of the money only after the final verdict or statement is known.
The lawsuit financing company has options like flat fee, where the lawsuit financing company decides beforehand what amount or share the client would pay after the final verdict is known. The lawsuit financing companies charge the plaintiffs with recurring fees that they have to pay until the verdict is made final. This recurring fee varies according to the case. It is usually collected on a monthly basis. The fee could be as low as 0.5% or could be as high as 15%.