Pros and Cons of Lawsuit Loans
If you are in the middle of a lawsuit and in urgent need of money, you may have to take the decision of whether you will apply for a lawsuit loan so that you can survive until the case is settled or the judgment is done in your favor. Mounting bills, along with inadequate income, force a large number of plaintiffs to take loans against their expected proceeds. These are known as lawsuit funding, lawsuit loans, lawsuit cash advances or settlement funding. If you have already arrived at a decision to take the loan, then go for Settlement Lenders Inc., Canada's foremost settlement loan experts. Everything you need to know about settlement lawsuit loans can be found easily on their website at www.settlementlenders.com
Lawsuit loans- What are they?
Filing a suit can be a time consuming and expensive enterprise. If you lose income due to injury or incur sudden expenses like medical bills, there is an even chance that the financial situation will worsen before your case is settled or you win a judgement.
In case you find yourself in this situation, it is an excellent idea to consider a lawsuit cash advance or lawsuit loan to ease the financial stress while you patiently wait for your lawsuit to unravel. The company that funds your lawsuit lain buys the right to all or a part of the settlement or lawsuit award in exchange for the advance which you will get while the case is in the court.
Pros of lawsuit loans
The two principal advantages of the lawsuit cash advances include:
It can help you survive
You get the much required breathing space and you can comfortably cover the living expenses, medical bills, car loan payments, and even mortgage payments during the lawsuit.
It offers you more time so that you can negotiate a better deal
This is particularly important if you are too reliant on the award or settlement to pay for various needs like medical bills. Taking a lawsuit loan could permit you to enjoy more time while you consider the offers for settlement. Your aim is to obtain fair result- and not prolonging litigation. If the lawsuit loan assists to relieve the financial stress, then you- and the attorney you have hired- will have extra time to negotiate with the defendant.
Cons of lawsuit loans
There are times when a lawsuit loan may not be a good idea- even when you need that cash. The reasons include:
They can be expensive
Paying the lender out of proceeds of your judgement or settlement involves paying back principal you originally borrowed plus interest payment or funding fee. This could be more than double or even triple the amount you actually borrowed in the first place.
All lawsuit loans are not eligible
Since a substantial risk is being taken by the lending company, it will only lend when it is confident about you winning the case. In case you lose, there is no need to repay the loan. Similarly, if you win less amount of money than expected, then there is no requirement to pay off the extra amount. It is natural that the lender will try its utmost to make sure that you receive the maximum amount of compensation possible. As lawsuit lenders are picky about their clients, you can expect to apply to an average of six different companies prior to finding one which will take you in.