Pre-Settlement Lawsuit Loans
There is much written about the pros and cons for pre-settlement lawsuit loans. Some people think the interest rates charged are high, while other people want the instant approval of a sure thing – cash. Lets take a look at what a lawsuit loan actually is and then, you decide.
A pre-settlement lawsuit loan is a “non-recourse loan” made by Lance Lawsuit Funding to a plaintiff with a pending personal injury opr medical malpractice case who is working with a lawyer. A “non-recourse loan” is not a loan, but an investment made by the funding company into the plaintiff’s case or lawsuit. A traditional loan requires a personal guarantee and must be paid back to the lender no matter what. A “non-recourse loan” made by a lawsuit funding company is an investment made into the plaintiff’s case. In this sense, if there is no settlement then the money is not paid back by the plaintiff. The most obvious benefit of this is that the plaintiff is selling and the funding company is buying a percentage of the “risk” asscoiated with the plaintiff’s case. It is the old saying, that sometimes, “A bird in the hand is worth two in the bush.” In other words, regardless of what happens with the plaintiff’s case, them money advanced as a non-recourse loan is only repaid if there is a settlement or verdict.
Here are the facts about Lawsuit Funding that make it practical for the right people:
- There is no credit or employment history check
- Credit scores are not considered
- Most pre-settlement money requests are approved within 48 hours
- The money is “risk-free.” It is not paid back un less the plaintiff wins a settlement.
- The money may be used for anything.
- There are no monthly bills.
- Many people need immediate cash for life, but have no place to turn.
Is A Bird In The Hand Worth Two In The Bush?
So the question is whether a bird in the hand is really worth two in the bush when it comes to lawsuit funding. Does the plaintiff want to sell part of their possible settlement or jury verdict for a certain amount of money now – that is not repaid if they lose the case. Statistically, most medical malpractice cases are lost in court and the majority of other personal injury case are lost too. In our recent blog, “Lawsuit Loan or Settlement Insurance,” we provide national statistics from one court study that states in medical malpractice cases plaintifs win only 23% of the time and in other personal injury cases, like motor vehicle accidents, plaintiffs win only 59% of their cases. Even when the plaintiff wins the case a jury may not award enough money and there are lenghtly appeals. It only makes sense to sell part of that possible settlement now, for money in your hand that is not repaid if the case is lost, as opposed to gambling everything in court.
The non-recourse loan or investment into the plaintiff’s case works both ways. The funding company makes an investment into the plaintiff’s case that assures a certain sum of money in his hands in return for a percentage of the settlement. But selling the risk of lost assocated with a lawsuit also has a price. This is mark-up the lawsuit funding company usually adds if the case is sucessful. Only you can decide if lawsuit funding is right for you. However, rather tah gamble your entire future on the outcome of a case in court, lawsuit funding allows you to share that risk of loss with the funding company. And, if you need money of life expenses or emergencies, have no credit history and a bank will not make a loan to you, then consider a lawsuit loan. Remember, a lawsuit loan is not repaid if there is no settlement – banks will not accept this risk.
If you are considering a lawsuit loan and want more information, then contact us, Lance Lawsuit Funding or call us .(201) 425-0743