In most cases, you don’t have to have good credit to apply for pre-settlement funding. After you fill out an application, the funding company will use it and other criteria to determine whether or not you qualify for a lawsuit loan. They may never need to run a credit check.
The lawsuit loan lender is going to be more interested in whether or not you are likely to win your case. They also need to determine how much money you are likely to receive in a settlement. If they believe that the settlement is going to be large enough for them to make a decent return on their investment, they may decide to approve your application for a lawsuit loan.
Now that you know that your credit scores will not stop you from applying for a lawsuit loan, let’s see how pre-settlement lawsuit loans work.
How Pre-Settlement Funding or Lawsuit Loans Work
You must have hired an attorney and filed a personal injury lawsuit to apply for a lawsuit loan. Not all lawsuits qualify, but a personal injury lawsuit is very likely to qualify. Some examples include the following:
- Wrongful death lawsuits
- Product liability lawsuits
- Medical malpractice lawsuits
- Premises liability lawsuits
- Car accident lawsuits
- Personal injury lawsuits
The lawsuit loan company will need to evaluate your case. The company will make an estimation as to how much money you are likely to receive as an award from the court or as a settlement. Once the important factors have been considered, the company may offer to give you an advance on the amount of money that you may receive as a jury award or a settlement.
You must remember that you have to pay for this service. The company will provide you with an advance on your future award or settlement in exchange for charging fees and interest, but you will never be charged interest or fees while your case is ongoing. You will only be required to pay interest and fees after you win your case or your case settles. That way, you would repay the company with the money you receive as a jury award or a settlement.
In most cases, you will not be making payments while your case is being litigated in court or while it is being settled.
What If I Lose My Case in Court?
This depends on the agreement you come to with the company. In most cases, you do not have to repay the cash advance if you lose your case in court. Most of the time, a lawsuit funding company is not allowed to collect the money that it gives you as an advance if you don’t win your case, but the company agrees to take this risk.
Your case could also settle, but the amount that you receive could be less than would be required to repay the fees and interest. If this is the case, the company will not be able to ask you to pay the difference between the amount you received as an advance and the amount you received as an award or a settlement. In this case, the company would be entitled to take what remains of the settlement after your attorney receives payment and court costs are paid. In this case, there may not be anything left for you at the end.
The benefit of a lawsuit loan may outweigh the negatives. For example, you will be able to pay your bills while you are waiting for your court case to end or settle. Contact a lawyer if you have any questions.
