Lawsuit funding provides financial support to plaintiffs waiting for their cases to settle or to receive cash after a settlement. An injury can leave you unable to work and without the salary or wages you depend on to pay the bills. Settlement funding can ease the financial burden. But as with anything, there are benefits and downsides. We’ll look at the pro’s and con’s below.
Pro’s of Lawsuit Funding
The biggest advantages of a lawsuit cash advance include:
- Immediate Financial Relief: If you’re unable to earn income temporarily or permanently, it can cover mortgage payments, rent, food, and other daily expenses as well as medical bills.
- You Don’t Repay If the Case Fails: A traditional loan requires repayment regardless of your circumstances. Lawsuit funding does not have to be repaid.
- Non-Recourse Funding: The term-based nature of legal funding means it’s an advance on your future settlement; all funds will be repaid out of the proceeds of your cash award.
- More Time to Negotiate: With your financial needs covered, you can take more time to consider a settlement offer. Meanwhile, your attorney can put more time and effort into negotiating with the defendant or insurance company or litigating your case.
Con’s of Lawsuit Funding
While you might need cash right away, signing up for an advance may not always be a good idea because:
- Some Cases May Run Very Long: Interest rates on a cash advance can be high. This means paying back more than you borrowed. Your attorney can help weigh the benefits by estimating the value of your case and how long it may take to settle.
- Not All Cases Qualify: The funding company will carefully evaluate the case, as it is taking on a significant level of risk. It may be picky, especially if it sees a weakness in your claim that can increase the odds of losing.
- A Lack of Regulation: Some states have added protections for consumers, but the federal government does not regulate the lawsuit funding industry. Regulations that apply to traditional loans don’t apply to lawsuit cash advances, except for interest rate limits and loan term disclosures.
- Reputable Funding Companies Are Hard to Find: Limited oversight means not every lender plays by the rules. It’s not that unfair treatment is a guarantee. There are many reputable funders out there, but it’s best to check reviews, get referrals, and research using resources such as the Better Business Bureau.
Apply for Lawsuit Funding with Fund Capital America
Fund Capital America is a lawsuit funding specialist that works with plaintiffs and law firms to provide much-needed financial relief. A lawsuit cash advance can help your attorney work towards a maximum settlement. Our legal funding is non-recourse; there are no out-of-pocket costs, hidden fees, or upfront payments. Pay us back only if your case wins.