Financing A Lawsuit

Financing A Lawsuit



Financing a​ Lawsuit
Financing a​ lawsuit provides monetary help when a​ person seeks legal remedy in​ a​ court of​ law,​ and​ does not have the​ finances to​ bear the​ expenditure. ​
The expenses covered by lawsuit financing companies include attorney fees,​ medical bills,​ health care,​ rent and​ mortgage,​ food etc. ​
Cases funded by lawsuit firms include personal injury,​ workers compensation,​ motor vehicle accidental injury,​ wrongful death,​ medical malpractice,​ product liability,​ breach of​ contract,​ fraud and​ others.
However,​ this should not be mistaken for a​ loan,​ as​ it​ is​ nonrecourse. ​
That is,​ the​ client does not have to​ repay the​ amount if ​ he or​ she loses the​ lawsuit. ​
The risk is​ undertaken entirely by the​ companies. ​
a​ loan,​ on​ the​ other hand,​ usually has a​ definite payback schedule within a​ fixed period. ​
as​ there is​ no way of​ determining how long a​ case will run,​ there is​ no rigid schedule of​ repayment followed by lawsuit financing companies.
These companies usually lookout for cases that have a​ strong chance of​ winning,​ in​ order to​ reduce the​ risk of​ losing money. ​
They have an inhouse attorney who studies cases,​ and​ decides which of​ those are more likely to​ win. ​
Subsequently,​ they fix the​ amount that is​ to​ be provided to​ the​ client,​ according to​ his or​ her needs.
There are basically three types of​ funding
1. ​
Presettlement funding
Companies provide funds before the​ verdict is​ announced. ​
These are generally provided when the​ client,​ due to​ some injury or​ some other reason,​ cannot work and​ earn money to​ pay the​ fees. ​
if ​ however,​ the​ verdict goes against the​ client,​ the​ company does not retrieve the​ money.
2. ​
Postsettlement funding
Firms give money only after the​ lawsuit is​ settled. ​
In such cases,​ however,​ they do allow partial advances.
3. ​
Attorney Loans
The firms directly provide the​ attorney a​ longterm credit that will take care of​ all the​ expenses incurred.
However,​ before accepting help from such companies,​ it​ would be wise to​ consider the​ terms of​ repayment,​ and​ options available. ​
The terms include the​ flat fee and​ the​ recurring fee. ​
One should make an exploratory survey of​ different companies,​ and​ choose the​ one that is​ the​ most suitable. ​
However,​ the​ chances of​ getting such funding would be negligible,​ if ​ a​ case has a​ higher probability of​ losing,​ because lawsuitfinancing firms scrutinize each case very carefully before providing help. ​
Generally,​ this kind of​ service is​ provided to​ only those whose attorneys are ready to​ bear the​ huge expenses,​ which the​ client cannot provide.
Some clients are often compelled to​ obtain lawsuit financing at ​ a​ high cost. ​
For example,​ they may either need to​ pay their medical bills,​ pay the​ rent or​ mortgage,​ or​ avail of​ health care facilities. ​
if ​ there is​ no other source of​ income,​ lawsuit loans are often the​ best option. ​
it​ is​ advisable to​ involve your attorney in​ processing a​ lawsuit loan,​ since he or​ she may be able to​ find you a​ funding company that offers the​ best terms. ​
An attorney will also be able to​ help you review the​ contract before you sign up with the​ lawsuit funding company.




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