You’ve been injured and have filed a personal injury lawsuit. An accident has left you unable to work for the next few months and, to make matters worse, the litigation process is moving along at a snail’s pace. Fortunately, lawsuit cash advances can provide the cash you need now, backed by the proceeds of your future settlement. There may be multiple options, so here are some tips to help compare pre-settlement funding.
Familiarize Yourself with How Lawsuit Loans Work
Pre-settlement funding isn’t like a traditional loan that must be paid back right away. The application process is generally fast. The lending company won’t check your credit; instead, they’ll speak with your attorney about your case, and make an offer based on its merit and odds of winning. You can accept or reject the offer. The funding will be paid back later once you receive the proceeds of your settlement (your attorney will deduct them before cutting your check or depositing the remainder in your bank account).
Check Interest Rates
Legal funding isn’t subject to the same regulations as the rest of the loan industry. Interest rates aren’t capped, so can vary significantly from one lender to another. Do your research before signing off on a loan. The provider may advertise no out-of-pocket costs. But sky-high interest rates can be costly in the long run, especially if the timeline of your case is uncertain.
Assess All Your Options
Pre-settlement funding is meant as a short-term solution to address a financial gap while awaiting a settlement or judgment. But it may not be the only option. If you have a retirement account, you may be able to pull cash from it. You may just have to work longer to get it paid back.
Tapping into your home equity is another option. While it’s unwise to do this for unnecessary personal spending, it can help pay your bills if you’re in a crunch, like when awaiting a legal settlement. Once your case settles, you’ll have the cash to pay it back. But since being unable to pay back a home loan risks foreclosure, choosing another type of loan is usually safer.
Your options may be limited if your credit score is low. Lenders may deny your request no matter what predicament you’re in regarding a personal injury. But you can ask family and friends for help. They may be generous when it comes to interest rates, but be aware you may have to pay taxes on any loans or donations, so get a financial professional’s advice before accepting money from anyone.
Look for Red Flags
There are a few indications that a lawsuit funding company might be shady. If you notice any of the following signs, skip that company and move on:
- The company advises not to include your attorney.
- Details on interest rates and fees are vague.
- Little information about it can be found online.
- You can’t find any reviews about them.
- It has been in business only a short time.
A reputable pre-settlement funding company should clearly disclose its fees. It should also be registered in your state. When communicating with the company, see that it doesn’t pressure you into making any decisions. They should be honest about assessing your case and providing options relevant to your needs.
Do Your Research
Research doesn’t end with checking reviews or asking friends and family members for advice. You can compare legal funding companies in the following ways:
The American Legal Finance Association (ALFA)
We said the lawsuit funding industry is unregulated, but there is a trade organization that can help. The ALFA has a code of conduct that its members must follow. This includes a lender having written acknowledgment from the plaintiff’s lawyer before making an offer.
The Better Business Bureau (BBB)
Check whether the company is registered with the BBB. In addition to showing they’re a legitimate business, this can provide access to reviews. Positive feedback can help you select which pre-settlement funding companies to compare and contact. Use the BBB Scam Tracker as well; it will tell you if a company is legitimate or not.
Talk to Your Attorney
If your attorney gives the OK to apply for a lawsuit cash advance, they can suggest legal funding companies you can use. That can narrow down your list of lenders to contact.
Ask a Few Questions
Have some questions prepared when you start calling lawsuit loan companies. The following will help you compare pre-settlement funding providers:
- What types of lawsuits do you fund?
- What interest rates do you charge?
- Do you charge compounded interest, and how frequently is it compounded?
- Are there options to refinance my funding?
- Do I have to pay back the cash advance if I don’t receive a settlement?
- What happens if the settlement is less than what I owe?
Contact Fund Capital America
Fund Capital America provides non-recourse cash advances for numerous types of cases. We offer pre- and post-settlement funding, settlement fee acceleration, and refinancing programs. You won’t owe us anything if your case loses or it settles for less than the value of your advance. Compare pre-settlement funding and our other options by browsing this site. To apply, fill out our online form or call 855-870-2274.