When a personal injury victim files a lawsuit against their opponent, it might take long before any settlement is arrived at. The plaintiff might go for a long period of time before receiving the award that they are entitled to. Due to this reason, most of these plaintiffs usually result to getting lawsuit funding from various institutions. This is especially the case when they have multiple outstanding expenses such as medical bills and other bills that need to be taken care of before the lawsuit is settled. Seeking lawsuit loans from financial institutions will help the plaintiffs with their expenses as they await compensation. Lawsuit loans are also sought after by lawyers to provide them with the necessary money when a case is in court.
Lawyers who get this funding usually use it to cover costs such as litigation support, hiring expert witnesses, general expenses, trial costs as well as business development and marketing. Plaintiffs usually have a lot of expenses that they need to be covered during the course of the settlement period. Lawsuit funding tends to be very beneficial for these plaintiffs as they don’t have any means f income due to their injury. By getting lawsuit funding, they get access to money that they need urgently and they should only pay it back when a settlement is reached.
It is only in the course of being awarded that a plaintiff is required to pay back the money to the financial institution as it is usually non-recourse. During settlement of a lawsuit, one might receive less payment than they anticipated and they are only required to pay back the same amount to the company. Before settlement of the lawsuit, these companies offer fixed fees on lawsuit loans that a plaintiff takes. Not every state has pre-settlement lawsuit funding as legal. Higher fees are charged on those kinds of loans that are likely to consume all the compensation from a settlement.
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These companies also offer post-settlement loans to those plaintiffs who have not yet been awarded. Plaintiffs go for post-settlement loans as the court might take very long to compensate the victims. This happens when the defendant makes an appeal to the ruling to be given more time in order to settle the award. During this time, the plaintiff is in need of money for their daily expenses which is why they go for legal funding.
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Every state as post-settlement loans as legal unlike pre-settlement ones. However both loans are non-recourse as plaintiffs can only pay back the loan once they get their compensation and the reverse is also true.