Civil litigation can be a costly process. Not only will you have to deal with physical and emotional pain, but the entire process can drain you financially. Even worse, lawsuits can take months or even years to complete. The good news is that you don’t necessarily have to drain all your finances to cover your lawsuit expenses. You can always rely on pre-settlement lawsuit funding to cater to all your needs and costs.
Ideally, lawsuit loans exist for the sole purpose of helping victims to settle their bills and support themselves as they wait to get their compensation. This funding comes with an array of benefits. However, they also come with an array of downsides, since most states don’t have tough lawsuit loan regulations to mitigate against these downsides.
There’s No Limit to the Number of Lawsuit Loans
Since lawsuit funding is minimally regulated, there’s no particular number of funding you can take out. In fact, some plaintiffs take out a second or third funding on their case. While this may look expensive, having an unlimited number of lawsuit loans comes with many perks. Perhaps, the most desirable benefit is that since it’s tough to predict when pre-settlement funding will end, you and your family will get all the funding you need.
Remember that you can always use the funding you get to pay for your hospital bills, personal needs, and food, among many other expenses. Therefore, you can always rely on lawsuit funding to meet all your daily expenses.
While lawsuit funding is virtually limitless, it’s important to remember that the amount of money you will get will depend on the approximate compensation value. Therefore, once you reach the total amount of compensation limit, your funding will automatically stop.
Is Lawsuit Funding an Actual Loan?
There have been lengthy discussions as to whether lawsuit funding is an actual loan. On one side, state governments are pushing for these advances to be considered as loans. However, lenders are stuck with the idea that these lawsuit advances are not loans. Regardless of the nature of these advances, it’s important to remember that these funds have legal and financial implications for all parties involved.
Practically, the vast majority of state governments insist that these funds are actual loans. One may argue that state governments want them to be considered loans to benefit from the taxes incurred. However, the silver lining is that the state governments wish for the entire process to be regulated. This ensures that while there aren’t limits on the funding process, clear boundaries can be set as to the maximum and minimum amounts to be given out, as well as interest charged.
On the other hand, trade organizations representing the funder believe that these advances shouldn’t be considered loans. Thus, the organizations believe that the funds shouldn’t be regulated by the traditional laws that govern financial funding and loan disbursements. This is mainly because lawsuit funding is quite different from the conventional loan in so many ways. One of the most significant distinguishing factors is that you don’t have to pay back the money if your court case doesn’t materialize. That is, you can walk scot-free if you don’t win your lawsuit.
Even so, some states choose to consider lawsuit funding as an investment and not real loans. In this case, this arrangement can prove to be challenging for the customers. Generally, when this arrangement is considered an investment, the customer will incur high-interest rates, since usury laws will not come into play, like in other loans.
In a Nutshell
Lawsuit funding can have a lot of benefits for you and your family. Not only can it help you cover your everyday living expenses, but it can also help you negotiate a more robust and better deal with the defendant and an insurance company. Therefore, you should ensure to utilize all the limits available in a lawsuit finding.