If you are filing a lawsuit and do not have the money, you should consider getting settlement funding. It is important to understand how the funding works and what it will mean for you in terms of costs and benefits.
What is settlement funding?
Lawsuit funding involves borrowing money against the expected settlement amount of the lawsuit. This can be very beneficial, especially when faced with personal injury that can hinder you from working for a living.
There are many companies that offer lawsuit funding and all of them have varying terms.
To choose the best one for you, below are factors to take into consideration;
1. How much do you want to take home?
At the end of the lawsuit, you will have to pay the loan company. If you have lost the ability to work, you definitely want to get a sizeable chunk of your money to sustain you and your dependents for a long time.
- Will the money you'll take home be enough to survive on?
- Is there a funding fee; is it fixed or does it vary?
A case can take a long time to settle and in the meantime, interest keeps piling up and eating into your settlement. Find a company with the most agreeable interest rates.
2. How likely are you to win?
When you apply for settlement funding, the loan company is taking all the risk. For this reason, the loan company will only take your case if they are convinced that you have a high chance of winning.
To determine if you have a good case, the lender will talk to your lawyer in order to get more information. To ensure your lawyer cooperates, you need to align him to the urgency of getting the loan.
A good lawyer will be upfront with providing information since he also stands to gain from your settlement. In any case, your follow-up is required to increase your chances.
3. Find a lender with a good reputation
Consult your attorney for advice on reputable lawsuit funding companies to use.
Take your research a step further by checking on social media and the internet to see what other plaintiffs have said about their dealings with the lender.
4. Compare and contrast terms from different companies
Most of the companies do not publish terms such as interest rates on their websites, so if you're doing internet research, you'll have to give them a call for more information.
- Avoid companies that charge consultation fee. You're getting a loan because you do not have money to spend on your lawsuit, so avoid unnecessary spending.
- Find out how the company calculates interest. Avoid borrowing from a company that calculates compound interest more than once a month as it will make your loan very expensive.
- Be careful of contract fine print; if anything is unclear, ask for clarity. If none is provided, move on to the next company.
Whatever your current situation, do not allow desperation to creep in and cause you to sign a contract. Take your time to consider everything, then sign a contract with the company that offers you the best terms.