What Is A Lawsuit Loan?
A lawsuit loan is a presettlement that is not a loan but an advance fee issued before settling a lawsuit. A personal injury plaintiff may ask for a loan against the pending settlement. These loans may seem like a good deal at the time but are usually viewed as a last resort for getting funds before settling a lawsuit. Another good question is can you get a loan from your lawyer to help carry you over until your claim is settled? Since this could create a conflict of interest with the lawyer, it is best the lawyer does not give you a personal loan. The lawyer may be more intent on getting his money back than settling the suit with your best interests in mind. A lawyer may refer you to a lender he has dealt with before to help a client pay his bills during the lawsuit. He may also refer you to a lending company that will give you a fair loan rate based on the compensation you are expecting. If you are looking for a loan to continue a lawsuit there are other methods of getting one. No-recourse lawsuit funding is expensive and you may be better off to look at other means of funding. There are several that come to mind, including a home equity loan to deal with expenses while waiting on a settlement. You may also apply for a personal line of credit or a personal loan. You may have friends or family that are able to give you a loan and you can always fall back on maxing out credit cards. This may seem a little drastic, but if you are involved in a personal injury lawsuit it does take time to settle. Your savings may run out and you do not have enough funds to pay bills and meet everyday expenses. Settlements have been known to take up to two years or longer to settle. If you are one of those who have enough money in your savings account to keep you going for the recommended 3 to 6 months, you may find that money running out before the claim is settled. Is a lawsuit loan the best choice for you? Sometimes there may be no choice than to get a loan to finance your lawsuit. Sometimes there is no money available to pay bills, medical bills, buy food and necessary clothing for your family. You may need a loan to keep your house or pay a car payment. If you are in dire financial straits a lawsuit loan may be the only alternative you have. If you do consider this to be the only choice, consult with your attorney before you begin the process. They may be able to help you find a company that will offer you a loan with the best possible terms. Your lawyer can then review the contract before you sign it to make sure it is a good contract. A personal injury lawsuit may take a longtime to settle. Be prepared to hang in there for the duration and do what you can to keep your bills paid while the suit is pending. It is a long process and sometimes you may be tempted to settle for a lesser amount because of your financial situation. Hold on if you possibly can, the longer you hold out, the better your settlement will be. It is in the insurance company's best interest if you take a settlement early in the lawsuit. If your claim is strong, hold out until you receive the settlement that you are due. |