Lawsuit Loans – What Causes Delays in Pre-Settlement Funding
Lawsuit loans, otherwise known as lawsuit funding, case loans, lawsuit cash advances, settlement loans or pre settlement funding is a complex financial business providing immediate cash in return for a portion of the future proceeds of a lawsuit.
Lawsuit funding’s aim is to help litigants ‘weather the storm’ financially while they wait for their case to reach settlement or other recovery. Since every lawsuit is different, each is evaluated thoroughly and carefully by lawsuit loan underwriters whose job is to assess the likelihood of settlement of any particular case and for what amount.
The vast majority of cases funded by Fair Rate Funding, and other lawsuit settlement funding companies, are routine personal injury cases. Examples include, slip and fall cases, motor vehicle accidents, Jones Act lawsuits, FELA claims or workers’ compensation cases.
However, medical and legal malpractice lawsuits, products liability cases, class action lawsuits and others increase the complexity and thus the amount of time needed to properly evaluate the risk of loss. This is obviously of primary concern to financial companies who offer lawsuit loans, since any loss is a total loss in the eyes of the lawsuit funding enterprise..
Many pre-settlement funding companies tout 24 hour service. And while clients regularly have their cases evaluated and funded by Fair Rate Funding within this time frame, many simply cannot be evaluated in 24 hours for various reasons.
Lawsuit Loans – Filling the Need for Information
Underwriting lawsuit loans in a timely fashion depends on the company’s ability to quickly obtain information about the case and put it into the hands of the case loan underwriters. Keep in mind that lawsuit funding underwriters must assess the risk of investment and weigh that against the likelihood of recovery in any lawsuit. If a lawsuit is “lost”, the lawsuit loan is also lost as previously mentioned.
Clients certainly understand all pertinent information must be reviewed before lawsuit loans can be approved. Fortunately, case loan underwriters possess skills in lawsuit loan risk assessment and can normally underwrite a file in a short time, once all the necessary information is received.
Helping companies which offer lawsuit loans to obtain information is one way the client can assist in the process and shorten the approval process. In some instances, the attorney handling the lawsuit simply does not possess all the information needed to make a funding decision.
For example, medical reports, police or incident reports, or insurance information may exist but the attorney may not documentation of proving their existence. The reason may simply be that the attorney does not the information right away since he knows all the pertinent information will come out eventually.
Although the attorney is not in any rush, the client needs immediate cash. Clients help their own cause and their attorney as well. By compiling all the documents necessary for a lawsuit loan, the client helps the attorney build his file with documents he will ultimately need to properly litigant the case.
Because lawsuit funding relies heavily on the production of supporting documents, their presence is of paramount importance. More than any other reason, the lack of proper paperwork is the reason why a lawsuit cash advance approval is delayed.
Thank you for your interest in the lawsuit funding business.