Legal funding is a process where plaintiffs get advances against their pending or settled legal claims. The legal funding industry is still relatively new but has become enormously popular over recent years due in part to the economic downturn. The process is relatively simple; the plaintiff contacts a legal funding firm who then requests specific case information from the plaintiff’s attorney. Once received, the case is then reviewed by an underwriter who determines the viability of funding. If approved, an agreement is drafted and sent to the plaintiff and their attorney. Upon execution, the funds are sent to the plaintiff to be used as he/she sees fit. In essence, the legal funding firm takes a lien position against the case and is not buying the entire case but rather advances against a portion of the expected future proceeds.
Legal Funding vs. Loans
Although non-recourse legal funding is often labeled and thought of as a “lawsuit loan”, it is actually not a loan because there are no credit checks or monthly payments to make, but is instead paid back when the case is won. Another factor that is very different about legal funding is that, in cases where the plaintiff’s case does not receive a recovery on their case, they do not have to pay back any funds they received from the funder.
Types of Legal Funding
When you start researching legal funding, you’ll learn that there are four different types of lawsuit funding that you can select from depending on your situation. Pre-Settlement funding is given before your case has settled. Settlement Funding is given after your case has settled but before your settlement check has been received by your attorney. Structured settlement funding can be used to help those who are receiving settlement payments over time. Verdict funding is for those who have won their case at trial but the defendant is possibly appealing the verdict.
Legal Funding is not for everyone. Due to the associated costs, legal funding is typically more expensive than loans, credit cards and borrowing from family so it’s a good idea to exhaust all other options before considering a legal funding advance. In order to figure out which option is best for you, contact us at LawCapital.com. Our toll free number is 1-800-568-8321. We will answer any questions you may have regarding the process of legal funding as well as help you to select the right lawsuit funding option for you. We will also help you get legal funding at a reasonable cost to you and in a timely manner.