Learn All About Lawsuit Funding

What is Lawsuit Funding?

In a nutshell, lawsuit funding is simply a funding company providing a plaintiff in a lawsuit with a cash advance against the favorable outcome of the case.

In other words, based upon the strength of the lawsuit, the lawsuit advance company will provide an advance (normally, in the range of 10-15%) on the amount of money the plaintiff is expected to receive should he win his case. This advance is non-recourse. This means that should the plaintiff not win the case, he does not owe the funding company any money in return. As such, lawsuit loan is not a typical loan because the money does not have to be paid back unless the case is won or settled.

Since this service has only been available for a few years now, most attorneys and hardly any individuals are aware of the fact that they can receive cash advances for pending lawsuits.

Why Lawsuit Funding?

Typically, in those cases where lawsuit defendants have deep pockets (i.e., Insurance companies, large manufacturers, banks, etc.), and the plaintiff is an average, ordinary citizen, those large companies and firms tended to string the process out. By doing so, they were calculating that the plaintiff would exhaust his limited disposable income and quickly settle the case for the much smaller sum of money.

In that way, the defendant would end up paying far less than perhaps it normally would have been made to pay had the case gone on for extended period of time. For instance, let’s take the example of slip and fall injuries.

Slip and fall injuries (or simply slip and falls, as they are widely known) account for more than 1 million injuries each year in the United States. Some times simple slip and fall can cause very serious injuries such as severe back injuries, paralysis, broken bones and head traumas. These injuries can often be permanent and irreversible, and usually require continual medical care. Costly medical treatment can leave victims and their families financially devastated.

Enter, lawsuit financing. This financial option is one good, safe and risk-free option for plaintiffs involved in a slip and fall lawsuit to finance their daily needs. This lawsuit cash advance will allow them to take care of medical expenses, household bills, mortgage payments, auto payments, education expenses, etc., as their case proceeds.

Were it not for lawsuit funding, many slip and fall accident lawsuit plaintiffs would be forced to settle early for way lesser amounts of money than they deserve because they simply could not afford to wait any longer. With lawsuit financing, there is no reason for them to settle for amounts less than what their lawsuit case is worth.

In addition to slip and fall injuries, consider the following saying, “Accidents can happen”. This may have been just a phrase in the past. However, today, the equivalent phrase may well be, “Accidents can happen, and if they do, the affected parties may sue!”

According to the National Highway Traffic Safety Administration , there are about 43,000 people killed in fatal motor vehicles accidents each year in the United States. In addition to fatal accidents, about 2.9 million people are injured each year.

As you are no doubt aware, auto accidents are happening at an alarming rate in our country, and because of this, the lives of innocent people and their families are adversely affected.

When a loved one is gravely injured or unexpectedly killed in one of these accidents, by - let’s say - a drunk driver, families are devastated, sometimes, even destroyed. They are affected, not only physically and mentally, but they are also financially strained.

As you know in any type of motor vehicle accident there are always two or more parties involved. The victim or victims in the accident are entitled to compensation from the party that can be proven liable for the accident. They can take legal action by filing a personal injury lawsuit.

Most plaintiffs involved in auto accident have missed work or lost their job and can no longer meet their household regular bills. Keeping up with their household payments can be a huge strain on them. People who need cash funds while waiting for a lawsuit to be resolved, and a fair settlement to be paid, have very few options.

They can use their own credit cards to get cash. This is an expensive alternative and can actually put them even more at risk if the lawsuit takes longer than you anticipate to be settled. And if they lose the lawsuit they still have to pay their monthly credit card bills unlike lawsuit loan or lawsuit cash advance.

A lawsuit loan, or litigation financing, is one good safe option for plaintiffs involved in a lawsuit to finance their daily needs. A lawsuit loan or legal cash advance may help them in taking care of medical bills, household expenses, mortgage payments, auto payments, education expenses, etc.

The problem is: Most of the plaintiffs involved in lawsuits do not realize they can get lawsuit loan or legal cash advance before their case settles.

The Importance of Lawsuit Funding

Most of them have missed work or lost their job and can no longer meet their regular household bills. Many of them are in need of medical treatments. Keeping up with their mortgage payments or rent can also be a huge strain on them. Any number of them may be one or two payments away from foreclosures. Additionally, they also continue paying children education expenses.

Deep-pocketed defendants can buy time with inventive legal ploys, maneuvers and delays to frustrate plaintiffs. The plaintiffs are often pressured financially, because medical bills and other expenses - not to mention lost wages - add up to stretch a household budget beyond its limits. This, in turn, can cause a lot of emotional and mental strain on the family or on their business.

Normally, what an attorney needs is more time, in order to get his client the fairest trial and the best settlement possible. Just as the defendants can buy time, so can the plaintiff. Lawsuit funding or litigation financing allows the plaintiff to get relief from financial pressure. By do so; the plaintiff does not have to settle his or her case simply because they need whatever money they can get right away.

With lawsuit funding, there is no reason for a plaintiff to settle for less than what his or her lawsuit case is worth. Lawsuit funding empowers plaintiffs to pursue their lawsuit cases in order to get the maximum lawsuit settlements they deserve.

How Legal Financing Fits Into the Legal Landscape

More and more frequently, both attorneys and plaintiffs in these situations have been turning to lawsuit cash advance companies for help. These pre-settlement funding companies also can save plaintiffs in personal injury cases from financial doom by giving them fast cash without credit checks or employment requirements.

Most of plaintiffs involved in lawsuits do not realize they can get lawsuit funding or litigation financing before their case settles. A litigant waiting for a settlement or judgment from a lawsuit can qualify for a lawsuit funding or lawsuit loan, ranging from $250 to $1M for a personal injury or other individual case and up to $10M for a commercial case.

This fact alone is - in a sense - changing the legal landscape. Prior to lawsuit funding or pre-settlement funding, many plaintiffs had no choice but to settle their cases prematurely due to pressing financial burdens at home. Now, however, based upon the strength of their case, lawsuit funding provides them an option to stay the course in seeking justice in their case.

Another huge reason that cash advance companies are the preferred option for plaintiffs facing financial burdens is that there are no monthly payments required while the case is still pending. Similar to the attorneys they help, cash advance providers allow attorneys and plaintiffs to work on a contingency basis, and will not require payback while the case is still litigating. Further, if there is no recovery from a case, the advance is pardoned. This makes pre-settlement funding a very viable, virtually risk-free choice for attorneys and plaintiffs.

How Lawsuit Funding Works

- A lawsuit plaintiff fills out a lawsuit funding application and submits it to the lawsuit funding company

- The lawsuit funding company contacts the applicant to ask questions about the case

- The lawsuit funding company contacts the plaintiff’s attorney for more information

- The funding company conducts its due diligence research

- When satisfied with the research, the funding company sends client a contract

- The plaintiff signs the contract and sends it back to the funding company

- The funding company then transfers the agreed-upon amount of money into the plaintiff’s bank account or FedEx’s the funds directly to the plaintiff (…plaintiff’s choice)

What Are The Alternatives To Lawsuit Financing?

For Personal Injury and other Individual Cases:

1. You can use your own credit cards: This is an expensive alternative and can actually put you even more at risk if the lawsuit takes longer than you anticipate to be settled. You still have to pay your monthly credit card bills. Lawsuit funding or litigation financing is a non-recourse lawsuit loan, which you pay back to litigation financing company only if you win or settle the case.

2. You can borrow money from friends or family: This also is high risk. If you lose the lawsuit, your family member and friends will still expect you to pay back the money you borrowed. Even if you win, there may still be problems because they may expect you to pay back the money, and give then something “extra”. Borrowing from family and friends is normally a no-win situation. Stay away from it as much as you can. This potential problem does not exist with lawsuit funding, as it is a non-recourse lawsuit loan.

3. You can take out a bank loan: However…banks do not generally make loans against future lawsuit settlements. They may offer you a personal line of credit based upon your financial situation and credit worthiness. Ordinarily, you must good credit and be employed.

Even if you do qualify, you have to start paying back a bank loan right away and continue making payments until it is paid off, no matter when you receive your lawsuit settlement and even if you lose your case and receive no money. But this does not apply to pending lawsuit loan or lawsuit funding.

4. You can try to obtain a home equity loan or second mortgage: This option is extremely risky. If, for some reason, you do not win your case, you could lose your home. Also, they would expect you to start paying back the money immediately. None of this is the case with a lawsuit loan or lawsuit funding.

For Commercial Cases:

5. Your sources of financing might be even more limited than in personal cases since you may not want to support the business with personal funds. Business loans require credit and financial qualifications that your company may not be able to meet if you are involved in a lawsuit. But commercial lawsuit funding or business lawsuit loan can be obtained without the above mentioned qualifications. Because pending lawsuit loan or lawsuit funding is based on the strength of the lawsuit.

Unfortunately, none of the options listed above will solve your immediate financial problems without overwhelming risk. This is where lawsuit financing comes in.

Advantages of Lawsuit Funding

1. Applying for lawsuit financing or a pending lawsuit loan is free, and without obligation. A reputable litigation financing company will not charge any upfront fee or any application, processing or monthly fees.

2. No credit or bad credit is alright, to apply for lawsuit funding because approval of is based solely upon the strength of your lawsuit. The lawsuit funding or lawsuit financing is not based on credit history, unless there is a pending bankruptcy.

3. No employment requirement is required to apply for a lawsuit loan or personal injury lawsuit financing.

4. The underwriting process to qualify a client is normally quick (…and thorough); some times as quick as 6-8 hours.

5. When approved for lawsuit funding or a lawsuit loan, funds can be wired into a bank account in the same day; a bank check can also be issued directly to the client.

6. You can use the lawsuit funding or lawsuit loan in any way you like; it is your money.

7. The plaintiff need only pay back the advance upon successful settlement or verdict in the case.

8. If the lawsuit funding client loses the case, he or she owes nothing to the lawsuit funding company; lawsuit advances are non-recourse. Lawsuit cash advance or personal injury lawsuit financing, is not a typical kind of loan. Loans are repayable absolutely.

A loan is type of financial aid which must be repaid, with interest. But lawsuit cash advance, litigation financing or lawsuit funding is actually purchasing an interest in your settlement. The funding company takes all the risks. So, if you lose your lawsuit case, you do not owe the lawsuit funding company anything in return.

9. When you apply for lawsuit funding or litigation financing, all information is kept confidential and only parties who know about the transaction are you the plaintiff, your attorney, and lawsuit funding company.

10. Lawsuit advance funding or lawsuit loans are no-risk and a win-win help for plaintiffs involved in lawsuits. These are available for nearly all types of civil and commercial lawsuits.

Some Lawsuit Funding Facts

1. Who is eligible for Lawsuit funding?

If you are a plaintiff, involved in any of following lawsuits (but not limited to), personal injury, product liability, auto accident, patent infringement, malpractice (medical, legal, construction), employment discrimination, fraud, breach of contract, Mesothelioma, negligence, workers compensation, class action, civil rights, whistle blower (qui tam), workers compensation (not in all states), wrongful death, commercial litigation etc.; AND if you are represented by an attorney, you may be eligible for a cash advance or legal financing on your pending settlement.

2. How can I benefit from lawsuit funding?

You no longer have to accept a low settlement offer. In the lawsuit process, many plaintiffs are forced to accept a low offer due to the financial hardship that many victims experience soon after their personal injury. An advance on your settlement will allow your attorney the time needed to get you full value for your case.

3. What types of cases are funded by lawsuit pre-settlement funding companies?

A good company would provide cash advances on mostly all types of cases. The most common types are listed in Number 1 above. Also, remember, as good company will not charge you any fees for applying or processing your request.

4. Is current employment and good credit necessary to get a legal advance?

No, the lawsuit funding or legal financing is not based on credit history, unless there is a pending bankruptcy. Applicants can even be unemployed and have bad credit. None of this matters.

5. Why don't I just get a bank loan?

Traditional financial institutions, including banks and finance companies, do not generally lend solely on the merits of a lawsuit. They deem the practice of lawsuit finance or lawsuit funding as too risky.

6. Is this a lawsuit loan?

No, this is not a loan. It is actually non-recourse cash advance on the future value of your case. Unlike a loan, if you lose your case you owe nothing in return. This is a very important point: the company making the advance takes all the risk.

7. Why is this not a regular loan?

You must repay a loan. It is type of financial aid which must be repaid, with interest. On the other hand, lawsuit cash advance, legal finance or lawsuit funding is actually a purchase of an interest in your settlement. So, if you lose your case, you do not owe the funding company anything. With a regular loan, however, you will owe the bank whether you win or lose.

8. Do I owe any up front out-of-pocket fees or costs? Are there any additional fees, such as monthly fees, involved?

Absolutely NOT! If a lawsuit funding company charges you any type of upfront fee of any sort, run, don’t walk away from them. A good lawsuit financing company will not charge any upfront fee or any application fee, processing fee or any monthly fee. There should be only a single fee (paid once the case settles) for the lawsuit advance, based upon the length of time it takes to settle your case. There will be a specific repayment amount, due and payable only after the case resolves itself successfully. And if you do not win the case, you do not have to repay the advance.

9. Will I have to sign any documents? Will my attorney be required to sign any documents?

Yes. You will need to sign an application and after you are approved for a lawsuit advance, you and your attorney will sign the Funding Agreement.

Essentially, you will be agreeing to repay the advance from your settlement. So, there is no out-of-pocket expense for you.

10. How big an advance on my settlement can I get?

Lawsuit cash advances are generally limited to, from 10% to 15% of the projected case value. Generally, the minimum advance is about $250 and the maximum amount in a single case can go up to one million dollars.

11. How would this help me get more money for my case?

Many times, in a lawsuit, the defendant plays a waiting game. In order to save time and money and settle the case early, he defendant will offer you far less than what the case is really worth. If you need immediate financial help (for instance, to pay medical bills, mortgage payments, living expenses, etc), you may feel financially pressured to take the first (and too often, the smaller) offer on the table. Lawsuit funding can ease your immediate financial needs and allow your attorney to continue to fight for a larger, more appropriate award.

12. Is the defendant’s insurance company notified?

No, the only parties who know about the transaction are you (the plaintiff), your attorney handling your case, and lawsuit funding company. The other side has no need to know and will not be told.

13. How long does it take for me to get the funds?

For most pre-settlement companies, if you are eligible, you can have an approval decision within 72 hours after your case documents have been reviewed. Most funding companies will wire your approved lawsuit funds into your bank account or, if you preferred, they can Fed Ex your funds to you within 24 hours of receiving your signed Funding Agreement via fax from your attorney.

14. How is the lawsuit cash advance paid back?

The lawsuit loan is repaid out of the financial settlement award from the case. It is paid at the same time that the proceeds of the claim are paid out to you.

15. What happens if I lose my case?

You owe absolutely nothing! The money advanced to you is yours to keep.

16. What can I use the money for?

Absolutely anything you like. It is your money. Most persons seek a lawsuit advance to pay their medical bills, house hold expenses, mortgages, living expenses, car payments, education expenses, etc. Because you, nor your attorney, will know how long it will take to settle the case, it is recommended that you use the advance to pay needed expenses. Though, nothing can stop you from doing so, you may want to think twice about using the advance to take a vacation, buy a new car, etc, until you case actually settles.

17. What if I need more money later?

If you have not received all the money from your case, you can often request another advance. (Remember: everything is dependent upon the strength of your case!) The lawsuit funding company may be able to advance you more on your case. So, you can make another request for additional settlement funding or pre-settlement funding at a later date.

18. Does the legal finance company get involved in my lawsuit case?

NO. Absolutely NOT! The funding company has no input or control in your case. They do not get involved in the attorney-client relationship. All management and decisions pertaining to your case are made by you and your attorney…period. The funding company has no role in the pursuit of your case what-so-ever.

Their only involvement is to initially review your case papers, so they can evaluate whether they should advance you money or not.

19. Is this legal?

Yes. The claim or lawsuit is yours and you own it, just like you own a piece of property. After paying your attorney fees and medical liens (if applicable), any remaining money from the settlement is yours to keep. You may sell or assign it as you wish.

20. How will my attorney feel about me doing this?

Attorneys, better than anyone else, understand that a lawsuit is a drawn-out process and that the defendant will attempt to “wait you out” while you eat through your available finances. So, (most) attorneys are sympathetic to the financial strain their clients can experience.

(Note) In some states, attorneys are not permitted to assist clients financially. However, they are allowed to assist you in seeking third-party financing, such as plaintiff lawsuit finance or lawsuit funding.

While you can apply for lawsuit funding without consulting your attorney first, please be aware that your attorney will play an important role in getting your lawsuit funding paperwork gathered and processed.

Attorneys are typically eager to help a client obtain plaintiff funding because it may mean that a long legal proceeding won't end with the client having no choice other than to accept a low settlement offer.

Applying for plaintiff funding does not interfere with the agreement between you and your attorney in any way.

21. Why can my attorney not lend me money?

The American Bar Association prohibits attorneys from lending money to clients for anything but case expenses. This prohibition exists to prevent a conflict of interest from arising. If you owed your attorney money you might feel pressured to accept your attorney's advise to settle your case when you really did not want to accept the amount offered.

22. Is this process confidential?

Yes. The entire process is private, confidential and quick. Funding company underwriters take a look at your case documents and determine if they think you have a good chance of collecting on your claim (i.e., winning). These are the same documents that your attorney prepared to fight your case. If they think your chances to win are good, they will offer you a cash advance.

Lawsuit Funding Market Forecast

This explosive growth is mainly attributed to three factors:

- The enormous amount of litigation in the country (…this is, after all, a litigious society)

- The large numbers of attorneys in the U.S. (…we have one of the, if not the, the highest number of lawyers per capita – number of lawyers per 1000 citizens - of any society and the world)

- The awareness brought on by consultants (…many more attorneys and plaintiffs are discovering the importance and availability of lawsuit funding…and they are spreading the word!)

Seeking Lawsuit Funding, Lawsuit Loan, Litigation Financing, Legal Financing?

Are you a plaintiff involved in a lawsuit and the defendent is stalling the case hoping you will settle for less than you are really owed? Do you need quick money to pay your bills and meet your many financial obligations (i.e., medical bills, mortgage, food, kid's education, etc)?

Are you a lawyer who has a case and you need additional funds to continue fighting for your client?

Are you unsure of what to do next? Confused? Don't know where to turn? Need help? Don't know whom to trust?

Then, you have come to the right place. At learn-about-cash-flow.com, we are here to provide you the help and guidance you need.

So, what's your next step?

Simply, click on the link below. We will ensure that a representative from a verified Lawsuit Funding company contacts you within 48 business hours.

Subscribe to the

Learn-About-Cash-Flow.com E-Zine

Want to keep up with the latest happenings in the cash flow arena? Want to learn more about lawsuit funding?

Then sign up for the Learn-About-Cash-Flow.com E-Zine, the most comprehensive cash flow e-zine on the Net.

We respect your privacy and will not give or provide, in any way, your information to any other person, business or site.

Do you want to ask a question about Lawsuit Funding?

Do you have questions about cash flow you want answered?

Do you have a comment or suggestion you want to make to improve our website?

Contact Us

Learn More About Lawsuit Funding At The Cash Flow Institute

There, you will have the opportunity to truly understand Lawsuit Funding, just what are cash flow notes, the true definition of cash flow, what discounted cash flows are, review the cashflow note business, learn how to flip cash notes, how to fulfill your cashflow note business opportunity desires, discover new discounted cash flow methods and techniques, how to find cash notes, create business notes and much more about selling business notes.

Cash Flow Institute Link For Lawsuit Funding

Return to Home Page