Lawsuit financing (commonly known as lawsuit loans or lawsuit advance) is a means to pay living expense during a pending litigation. Most of the time the plaintiff has financial burden as a result of the legal expenses.
In the case of a personal injury lawsuit, where injury affects the plaintiff's ability to work, he or she will lose income, accumulate unpaid bills and owe medical expenses. The medical expenses are often expensive due to the nature of the injury.
Because of the added financial burden, the plaintiff should consider lawsuit financing.
While plaintiffs who claim personal injury may eventually receive settlement, it may take a long time to receive the compensation. Defendants that are large companies may prolong the litigation to force the plaintiff to settle for a lower compensation or drop the litigation. When this happens, a litigation advance can help you persevere against the delay in settlement and eventually receive the fair amount of compensation.
Even though conventional means of funding (such as credit cards and bank loans) are less costly, they require checks on your credit ratings, employment and net worth. If you do not fulfill the stringent standards that show your ability to repay the credit/loan, your loan will not be approved. And these standards will likely be unmet without a job and maxing out your credit card.
This is where there is an advantage with lawsuit loans. Lawsuit financing companies review your lawsuit and determine if there is a high probability of you receiving settlement. In most cases, this will be so. And that is the main requirement for a lawsuit financing application.
Moreover, you only repay the lawsuit cash advanced to you if you win the lawsuit or receive out-of-court settlement. If you lose the case and compensation, you do not need to repay the lawsuit 'loan'.
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