Legal financing is essentially a cash advance on the future settlement or jury award you will receive. You are only eligible for it if you have filed a lawsuit (personal injury, wrongful termination, etc.) against a person or company, and you have a competent lawyer handling your case.
A lot of people shy away from legal financing because it charges higher interest rates compared to banks and credit unions. However, it also has its share of benefits. In fact, we’d go so far as saying that getting lawsuit financing has more benefits than drawbacks.
First of all, there is no financial risk on the litigant. If you lose your case, you don’t pay the lender anything. Secondly, it will enable you to pay all your outstanding debts, prevent you from declaring bankruptcy and even help you keep your home. In addition, with this kind of financing, you won’t be pressured to accept low ball out of court settlement offers because you won’t be desperate for money. Finally, you can even afford to pay expensive expert witnesses (doctors, psychologists, etc) that will further boost your case.
Obviously, this kind of legal finance loans is not for everyone. But if you have very few choices, if at all, then opting for a lawsuit finance would serve you well. Before deciding on which lender to do business with, see to it that you do your homework and compare rates from various lenders.