Fair Rate Funding provides the quickest lawsuit loans near me. Personal injury lawsuit loans are financial transactions for accident victims who need cash right away. Also known as lawsuit funding or lawsuit loans near me, personal injury settlement loans are advances on the future proceeds of a lawsuit or claim. Personal injury loans are made prior to settlement.
This page discusses the need for lawsuit loans near me, why lawsuit funding for personal injury claims is most common and address some criticisms of the lawsuit loan business in general.
The Need for Lawsuit Loans Near Me
Pre-settlement loans advance money to plaintiffs who need to pay expenses such as rent, utilities, car payments, medical treatment, etc. The need for this service exists because accident victims are often out of work due to their injuries. Because of this, they cannot keep up with expenses while the case progresses.
Plaintiffs soon realize they are up against a financially strong insurance company and team of defense lawyers. Many cases take years to settle. Due to the financial pressure, many plaintiffs are forced to accept low-ball settlement offers just to stay afloat.
How Personal Injury Settlement Loans Work
Personal injury lawsuit loans near me are a response to this dilemma because they provide immediate relief to claimants. The entire settlement loans near me process is listed below:
- A plaintiff or his/her attorney contacts a lawsuit funding company because they are looking for lawsuit loans near them.
- During a phone call, preliminary facts are discussed, and call is screened for pre-qualification. That means, there is a chance the case is “fundable”.
- Also during the call, the applicant asks about costs and the repayment amount, etc.
- Once comfortable, the applicant/plaintiff applies for lawsuit funding near me. The information provided includes name and contact information as well as his/her attorney’s contact information.
- Nearby lawsuit loan company requests paperwork from attorney’s office via fax or email or both.
- Received paperwork is reviewed. At this juncture, a lawsuit funding underwriter may ask the attorney questions about the case.
- Once underwriting is finished, the company will approve/deny the applicant.
- If approved, a contract is sent to the plaintiff/applicant and his/her attorney.
- Client signs agreement and returns the documents.
- Attorney signs the attorney acknowledgement indicating he will repay the advance out of the settlement proceeds, if any.
- The money is sent via overnight delivery or bank transfer. The applicant becomes a “client”.
- If the case is successfully resolved, client’s attorney repays the lawsuit loan near me out of the settlement proceeds.
Personal Injury Settlement Loan Alternatives
Personal injury plaintiffs seek lawsuit loans near me when other sources of cash cannot be found. Usually, plaintiffs have exhausted all other means of securing financial relief. These include asking friends and family for help, withdrawing available retirement funds from IRA’s and/or 401K plans, getting a home equity loan or refinancing their mortgage, selling possessions, or others.
Settlement loans are usually a last resort. Sometimes used as a hedge, lawsuit loans near me can be a valuable financial tool. Mostly however, settlement loans are only used if no other relief is available.
How Lawsuit Loans Near Me Are Used
There are no restrictions on the use of a lawsuit loan near me. Plaintiffs use the advance to pay living expenses or help their attorneys pay for case expenses such as expert fees, court costs, deposition testimony, accident reconstruction experts, 3D Renderings of positive MRI studies and/or other demonstrative tools.
Another common example is paying for needed surgical procedures. This is referred to as surgical lawsuit funding and this is how it works:
A plaintiff is involved in an accident which results in an injury serious enough to require surgical intervention. Because the plaintiff has no health or other insurance to cover the cost of the procedure(s), he contacts a lawsuit loan company near me to pay for the surgery. The parties enter into an agreement in which plaintiff pledges a portion of the future proceeds of the case to the company. In return, company pays the medical providers directly including the surgeon, surgery center, staff, and others. The client receives the treatment he/she desperately needs, the medical professionals get paid, and the attorney gets a higher fee because surgical cases usually settle for higher amounts.
Although surgical lawsuit loans near me are common, any expenditure which immediately benefits a plaintiff can be a worthwhile use of the funds.
Personal Injury Settlement Loan Near Me Basics
Settlement loan near me transactions offer immediate financial support. The plaintiff pledges a portion of the future proceeds of the case in return – but only if the case is successfully resolved. If the case is unsuccessful, the advance is not repaid. Because of this, lawsuit loans near me are not loans in the traditional sense of the word.
Rather, lawsuit settlement loans are actually a transfer of property rights in the potential proceeds. If the case loses, there are no proceeds. Thus, what was purchased is without value. In other words, there is no repayment if the case is unsuccessful.
Repayment of a lawsuit loan near me is calculated by multiplying a use fee with how long it takes for the lawsuit to resolve.
Attorneys Must Cooperate
Lawsuit loans near me depend on attorney cooperation.
After a plaintiff applies for a lawsuit loan near me, the company sends a request for information to his/her attorney. In some instances, plaintiffs will have the paperwork themselves. But document compilation is only part of the process.
If a case is approved for funding, attorneys acknowledge the assignment, place the contract in the file and agree to repay, from their trust account, the amount owed once the case is settled. Legal representation is a pre-requisite for almost all lawsuit loans.
Personal Injury Settlement Loans Rates and Cost
Personal injury settlement loans near me can be costly relative to other types of “financing”. The cost is calculated using a percentage rate in calculating the repayment based on time. Some lawsuit funding companies will not label the percentage rate “interest” to avoid confusion. Instead, the calculation is referred to as a “use fee”. Further, there are no payments on lawsuit loans near me until the advance is repaid in full.
Lawsuit Loan Near Me Rate Structures
There are two main types of rate structures in the settlement loan business. The first calculates repayment by charging a monthly percentage rate on the contract amount. The next month the percentage rate is calculated on the previous month’s balance. Because this calculation charges a percentage rate on the balance (which also includes accrued “interest”), the charges are said to “compound”.
The other repayment calculation method for lawsuit loans near me applies a percentage rate to the original contract amount. This amount is normally called the “purchase price” (the amount the funder pays to “purchase” the property). This calculation is deemed “simple” interest because the charge is always calculated on the original price and not the previous month’s balance.
Comparing these two rate structures reveals the following: Compounding rates are generally less for the first six months. Between six months and two years, there is very little difference between the two structures. After two years, the payoff can be significantly more with the compounding rate.
Time and Lawsuit Loan Repayment
Lawsuit loans near me calculate repayment in six (6) month periods. In other words, if a case is resolved within the six-month period, the repayment remains constant. If after that period the case is still pending, the payoff is calculated by adding an additional use fee. This new amount remains the payoff for the next six months.
For example, a client receives a $10,000 lawsuit loan near me. The payoff from the date of signing until 6 months later will be $12,000 ($10,000*1.20). If the case is still pending after 6 months, another 20% is added to the payoff. So, if the case is resolved between 6 months and 1 year, the payoff would be $14,000 ($10,000 *1.4).
The advance must be paid in full to discharge the personal injury settlement loan. Partial payments are generally not accepted.
Criticisms of Personal Injury Lawsuit Loans Near Me
Over the years, lawsuit lenders endured much criticism from the insurance industry, specifically property casualty insurers. These opponents point to the high cost of lawsuit loans near me as proof the industry as a whole is trying to prey on vulnerable plaintiffs.
Insurers exist to spread the risk of loss. In many instances, the use of P&C insurance is mandatory (e.g. mandatory automobile liability insurance). Insurers are for profit enterprises and minimizing payouts is one way they increase profits. Because lawsuit loans level the playing field between injured parties and insurers, plaintiffs can refuse low ball settlement offers and proceed to trial. These can result in an increase in payouts, something insurers would like to avoid. Thus, opposing lawsuit funding in the media is one way financially strong companies oppose funders.
Proponents of Lawsuit Settlement Funding Loans
The lawsuit funding near me industry exists because plaintiffs’ needs are being met. That is, if plaintiffs did not need immediate cash, there would be no business. Lawsuit funding has grown into a viable business model in the last 15 years. This growth illustrates that clients and their attorneys see the value in the service.
Responding to the claims of “unfair” contract terms, many lawsuit funding companies use the industry’s best practices as outlined by the Attorney General of the State of New York. Years ago, several lawsuit loan companies worked the New York Attorney General to create certain guidelines for the lawsuit funding industry.
Some of the best practices recommend all contracts have a disclosure statement which must contain the following information:
- The total amount to be advanced;
- Any fees, broken out item by item (e.g. application, processing, attorney review, broker, etc.);
- The percentage cost, stated on an annualized basis, including frequency of compounding, if applicable;
- The total repayment amount, broken out by six-month intervals, carried forward to 36 months, including all fees as well as any minimum required payment amount.
Lawsuit loans near me offer their services in a clear and honest manner.
Which Cases Qualify for Lawsuit Loans Near Me
The following types of cases are routinely advanced money prior to settlement.
- Auto Accidents
- Slip/Trip and Fall Cases and other Premises Liability actions
- Workers’ Compensation cases
- FELA (Railroad Workers)
- Jones Act (Maritime Injury)
- Medical Malpractice
- Nursing Home Negligence
- Wrongful Death
- And more . . .
The most common personal injury settlement loan involves car accidents. These are the most common. Slip and fall cases or premises liability lawsuit loans are also abundant. These are when a person is injured due to the negligence of a property owner or other party who breached a duty of care.
Approvals depend on factors including the case’s venue (state and county), attorney, availability of documents, insurance coverage, stage of proceedings and host of others. Lawsuit loans near me underwriters use their skill, expertise and experience evaluating claims for funding.
One universal lawsuit loan requirement is that the plaintiff must be represented by counsel.
Help with Injury Lawsuit Loans Near Me
As you can see, lawsuit loans near me fill a legitimate need in the marketplace. They are an integral part of personal injury practices and the legal landscape in general. For more information, consider reading the Legal Funding Guide for Plaintiffs.
If you were injured and are involved in a personal injury lawsuit, you may be eligible for settlement funding. If you need money now to pay for such things as car loans, groceries, student loans, mortgage or rent payments, medical treatment or any other expense, call us to see if your case qualifies. The money can be used at your discretion and without any restrictions. The call is free. There are no credit checks and no upfront costs.
If you have any other questions regarding lawsuit loans near me, personal injury settlement loans, lawsuit funding, or another type of legal financing, please contact us at 888-964-2224. When financial strain forces you to consider accepting less than you deserve, don’t wait – call Fair Rate and let us help you.