Is a Lawsuit Loan Really A Loan?
todd bower - Tuesday, January 25, 2011
When a plaintiff in a lawsuit receives pre-settlement funding to help cover medical and living expenses, it is often referred to as a lawsuit loan, or legal loan. However, this lawsuit funding is really not a loan. There are no regular payments made on the funding. There is no credit check performed or creditworthiness associated with receiving the pre-settlement funding.
This type of lawsuit funding is non-recourse. This means it is only paid back if, and when, the plaintiff's case is successfully settled. The plaintiff is really receiving a portion of the final settlement up-front, when the cash is needed.
The lawsuit funding company works with the plaintiff's attorney to build a case profile. If the case qualifies for a "lawsuit loan" then the lawsuit funding company will provide the requested funds. When the case settles the lawsuit funding is paid back out of the proceeds of the settlement, including a fair return on the funding for the risk taken.
The greatest benefit of lawsuit funding is that it gives the plaintiff and their attorney "staying power." It removes the short-term need for cash, which means there is no need to settle the case prematurely due to financial pressure. This very often results in a significantly larger final settlement for the plaintiff.
P&T Financial is a leading lawsuit funding company with an easy application process and competitive rates.
- Trackback Link
- http://www.ptfin.com/BlogRetrieve.aspx?BlogID=3329&PostID=179893&A=Trackback
- Trackbacks
- Post has no trackbacks.
Comments
Post has no comments.