8 Facts & Tips Plaintiffs Should Know Before Getting a Cash Advance on a Pending Lawsuit Settlement
Pending lawsuit loans are sky-rocketing in popularity.
Cash-strapped plaintiffs all across America are taking out loans against settlements to financially hold themselves over until their cases settle.
Unfortunately, there isn’t much coverage on the industry by the mass media. This has resulted in the public being misinformed, leaving room for companies to take advantage of unsuspecting plaintiffs and their attorneys.
Also known as pending settlement loans, this service can benefit you greatly—but only if you score the right deal (and with the right company).
Like anything else, the key to getting a fair deal on a cash advance on pending lawsuit is knowing the ins and outs of the process BEFORE you apply anywhere.
This post will show you how to…
- get the most cash against your lawsuit
- get the lowest interest rates possible
- secure a pending lawsuit loan without upsetting your law firm
- get the funds as fast as possible
What You Need to Know About Getting a Cash Advance on Pending Lawsuit
Pending lawsuit loans (or loans against settlements) can be tricky and misleading for beginners. This article is meant to help you, the plaintiff, get the best deal when you apply to borrow against your pending settlement or lawsuit. In an industry full of sharks, making a smart decision can be the difference between paying 200% of interest or 35%.
Here we go:
1: Many companies are not direct in explaining the cost of the lawsuit loans they offer.
**TIP: Always ask what the interest rate is. When a company charges high rates, they are less likely to be straightforward with you when you ask about it. Before answering any of their questions when you call, ask them this first: “What do you charge?”. If the representative doesn’t give a direct answer, be very wary.
2: Applying with brokers is expensive, slow, and more likely to aggravate your attorney.
**TIP: Avoid working with brokers and only deal with direct pending lawsuit loans companies. Lawsuit loan brokers can add an unnecessary 15-20% in cost to your transaction. Even worse, they will send your case information to dozens of different funding companies, all of which will call your attorney’s office at the same time. Needless to say, your attorney will not be happy.
3: Your law firm will respond to a funding company sooner if you mention their name in advance.
**TIP: Give your lawyer a heads-up before applying. Before applying for pending lawsuit loans, notify your attorney first. This will help your law firm be prepared for any document requests by the funding company. Remember: the whole process occurs between the funding company and your attorney’s office. Keeping the two parties in-sync can do wonders for expediency.
4: Finding the right company for your case is tough.
**TIP: Ask your lawyer if he or she regularly works with/ or is aware of a professional pending lawsuit loans company. Why risk trying a new company if your lawyer already has a working relationship with one? Nonetheless, you must stay vigilant—just because your law firm works with a funding company doesn’t mean it’s the right one for you.
5: The more questions you can answer about your case, the fewer questions the funding company will have for your attorney.
**TIP: Know your case like the back of your hand before applying. To get the process moving along faster, review all the general facts of your case before calling to apply. Every question you answer is one less question your attorney will have to spend time answering.
6: Funding companies move as fast as your attorney send them your case documents. This often takes time as law firms are usually very busy.
**TIP: For faster service, come prepared with case documents.If you want to get the ball rolling sooner, collect the following information from your attorney prior to applying: filed complaint, key medical reports, demand letter and police report (if you have a personal injury case). These are the general documents a funding company would request from your law firm. Having these documents available ahead of time will help you skip this step.
7: The loan amount you qualify for is equal to 10-20% of your case’s entire monetary value.
**TIP: Ask your attorney for the estimated value of your case before applying. This will help you expect a realistic amount when you apply for loans against settlements or lawsuits. Approximately knowing the amount you can qualify for will help you better manage your expenses down the line.
8: Pending lawsuit loans against settlements can be expensive.
**TIP: After finding a direct funding company with low rates, only take what you truly need to survive. While the money is yours to spend as you wish, it is recommended you only use the cash for living expenses and other necessities.
WATCH: How to Qualify for a Lawsuit Cash Advance
3 Questions to Ask Before Applying for a Lawsuit Cash Advance
1. Will I be required to repay the cash advance if I lose my case?
If the answer you receive is anything but a clear and resounding ‘no’, it’s suggested that you move on. Under no circumstance should you have to repay the advance if you lose your case. A credible funder will only expect repayment if you win your case. Legal funding is suppose to be non-recourse, which unlike a loan, carries zero risk to the plaintiff. This is because repayment is contingent upon you winning a recovery — if you lose your case it should be your right to keep the money for free.
2. What fees and rates does your company charge?
Always know what you’re paying before signing up for a lawsuit cash advance. Most funding companies assign rates based on the risk-profile of a case, while other have fixed rates for all types of cases. You need to know if your interest accrues monthly or if a fixed payback is assigned for defined ranges of time. Always ask the company’s representative if the rate is compounded monthly or if a fixed payback is expected.
As a usual guideline, anything below 3.5% per month is considered industry standard. Be wary of lawsuit cash advance services that charge interest above 4%. Timing of when you’re applying for a lawsuit cash advance must also be taken into account. The earlier you apply during litigation, the larger the payoff will be once your case is settled one or two year down the line. A safe way to protect yourself is to find the lawsuit cash advance company with rates below 3% per month.
3. Does your company require early paybacks or monthly payments?
If the answers to either of these questions is ‘yes’, do not work with this company. As mentioned before, the non recourse nature of this transaction doesn’t require the usual terms that come with a regular loan. Therefore, you should never have monthly payments due, nor should you be pressured for early paybacks. As a general rule, legal funding companies will charge you nothing until—and if—your case is settled. That means: no application fee, no hidden fees, and and no monthly payments.
Is Getting a Cash Advance on Your Lawsuit the Right Move for You?
Loans against lawsuits are for plaintiffs who are injured and can’t wait for their cases to settle.
If you are in stable financial footing, it is not recommended that you borrow money against your lawsuit. You should only consider getting loans against lawsuits if you truly cannot wait for your case to settle. Otherwise, waiting patiently for your case to settle is your best course of action.
If you’re in an ongoing lawsuit and the bills are piling up, call Nova Legal Funding at 800-760-0704—or apply online by filling out the contact form at the top-right hand side of your screen.
Ready to apply for a pending settlement loan? Nova Legal Funding is here to help.
This post was written by Nova Legal Funding (NLF), a California lawsuit settlement loans company that serves plaintiffs nationwide. Unlike other companies, NLF is open and transparent about our funding process. As a result, we’ve been able to help a countless number of plaintiffs get loans against pending lawsuits. NLF provides funding to all types of cases, including but not limited to:
- General personal injury accidents
- Car accidents
- Defective products
- Medical malpractice
- Premise liability
- And much more (for a complete list of the cases we fund, click here)
“Nova Legal Funding went above and beyond to help me.”
“I have a lawsuit against Wal-Mart and unfortunately my case won’t be settled until some time next year. In the meantime I am unable to work due to the extent of my injuries. With no money coming in, I decided to apply for a pending lawsuit loan. Ron with Nova Legal Funding went above and beyond to help me. Even though I was denied twice, Ron didn’t give up. I can’t thank Ron enough for all of the time he spent to get an approval.”
– Lisa B. via Facebook ⭐⭐⭐⭐⭐
The post Getting a Cash Advance (Loan) on Your Pending Lawsuit appeared first on Nova Legal Funding.