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How Pre-Settlement Lawsuit Funding Works
by:
Afra AmirSanjari
An injured
person contacts a company that offers pre-settlement lawsuit funding,
sometimes at the suggestion of an attorney. The finance company contacts
the lawyer who is handling the case, and obtains information about the
case. Based upon that information provided, the loan company estimates the
value of the likely eventual settlement or verdict, and offers a cash
advance to the injured person based upon that estimate. The fee may be a
flat fee, or a monthly fee that accrues each month the loan is
outstanding. When the case settles, or the defendant pays after losing in
court, the loan and associated fees are paid to the finance company.
These
advances are offered as non-recourse funding, which means that an injured
person has no obligation to repay if the lawsuit is lost. Similarly, if
the ultimate settlement or verdict is smaller than anticipated, the amount
that must be repaid never exceeds the amount of the injured person's share
of that verdict or settlement. For legal reasons, these advances are not
characterized as loans.
Amounts
available vary significantly, depending upon the nature of the case and
the company involved. Many companies offer pre-settlement funding amounts
between $500 and $25,000. A few offer amounts up to $100,000. Fees also
vary depending upon the company and the type of case. Some companies will
fix the fee for the advance up front. Others will charge a monthly fee for
each month between the time the funding is issued and when it is repaid,
sometimes as high as 15% per month.
by-http://www.peacockcapital.com |
