A pending lawsuit loan is a type of cash advance. It can cover living expenses, medical bills, and other costs. Best of all, you don’t owe the lender anything out-of-pocket; the advance is backed by the proceeds of your future settlement and only repaid if your case wins. These non-recourse loans are convenient, but do they improve your odds of success? 

The loan doesn’t strengthen your case or increase the chances of winning. But many lenders are selective and more likely to approve plaintiffs with a meritorious claim. However, it’s up to your attorney to focus on the case and work to get a fair payout.

Lawsuit Loans Help Your Attorney Work on a More Favorable Settlement

If you’re short on living expenses, pursuing a lawsuit is difficult. Your attorney may be pressured into a faster settlement, which usually means recovering less money. But a cash advance can reduce financial stress. Therefore, your attorney can take more time to build a stronger case and pursue a higher settlement amount.

Litigation Funding Companies Cannot Influence the Outcome of a Case

The lender and your legal counsel may communicate from time to time. But this is just to remain informed about the progress of your case. A funding company does not have control over litigation strategies, settlement decisions, or the client-attorney relationship (nor does it waive the attorney-client privilege). Any attempt to influence a case violates rules set by the American Bar Association (ABA). The ABA requires that:

Litigation funding should also not complicate a case. Numerous courts have held that documents related to pending lawsuit loans are not discoverable. They’re not relevant to claims and defenses between parties. Court decisions have also held the work product doctrine protects funding-related documents and communications from disclosure to third parties.

The Lender Must Review Case Documents

Once you apply with a lender, they’ll need to see case documents from your attorney. Therefore, it’s best to inform your lawyer of your intention. They’ll be more likely to respond quicker and can gather the relevant documents ahead of time. These include the demand letter, a copy of your complaint, medical reports, police reports, and other case documents. Being proactive can avoid or reduce the risk of delays in your case due to funding issues.

Beware of High Interest Rates

Taking the loan won’t impact the merit of your case. However, it can limit what you receive later. The interest on a lawsuit loan can cut into your future settlement amount. 

A lender will make an offer based on the value of your case and other factors. To be safe, take only what’ll cover basic living expenses, as some lenders charge compound interest, and set up other arrangements that can make borrowing more costly than expected.

Apply for a Cash Advance with Fund Capital America

When you receive a cash advance from us, there are no out-of-pocket expenses or hidden costs. We also employ a fast and convenient application process. Approval and offer amounts are based on the strength of your case, the type/severity of your injuries, and your chances of winning. To learn more about pending lawsuit loans, call us at 855-870-2274 today.