May

Settlement Funding

Links To Information On Settlement Funding

Overview of Pre-settlement Funding

Settlement lawsuit funding comes in the form of non-recourse cash advances. This money is provided as an advance to the injured party with the promise of repayment following a lawsuit. The fees are usually really high in this form of financing due to the high risk involved in the “non-recourse” funding. “Non-recourse” settlement funding means that the injured party does not have to repay the settlement funding company if the injured plaintiff doesn’t win. Also the funding that is repaid to the funding company can never exceed the amount of the plaintiff’s share of the verdict or settlement. But be sure to consult with your lawyer before entering into the contract with a pre-settlement company to make sure you are doing the right thing.

How Does Pre-Settlement Lawsuit Funding Work?

Presettlement funding usually begins at the suggestion of the client’s lawyer, and if the client is interested, the lawyer will provide information about the case to the settlement company. Taking everything into consideration, the settlement funding company will make a cash offer to the plaintiff based on an estimation of the final settlement amount.

Once their is an agreement between the injured plaintiff and the pre settlement funding company is complete, there are primarily two different ways that the financing is carried out. One way is a flat fee payment up front. The client receives an agreed upon amount in one lump sum. Another way is an agreed upon monthly payment .

When Do I Need To Get Settlement Funding?

While every situation is different, many times the process of litigation can drag on for years. People in conditions where they cannot work, have reduced income, added expenses may not be able to make it very well financially during the time it takes for the legal process to finish. Not to mention the legal fees that also may occur during the wait. However, if you can live comfortably without having to get presettlement funding, we would recommend not doing it. You will not get the full amount of your settlement due to fees, so it s also recommended that if you do choose to go the pre-setlement route, that you take a look at more than one pre-settlemnet company so that you can get the best offer. And most of all… pray about it! These types of decisions are very important and the Bible says to pray without ceasing. 1 Thes. 5:17

What Are Some of The Ethical & Legal Issues To Pre-Settlement Funding?

One big reasons the pre-settlement companies exist is due to bar associations in most states seeing it as problem for lawyers to loan money to clients based on the probability of victory in court. They see it as an opportunity for possible bias, possibly damaging the attorney-client relationship. some states even prohibit lawyers from being a part of the settlement funding company’s pre-trial evaluation process. Another issue is the fact that these settle funding cannot be referred to as a “loan” due to usury laws (that are in place to prevent companies from charging excessive interest on loans) and the fact that the funding is not required to be repaid if the trial is lost by the plaintiff. Other issues can arise such as frivolous lawsuits just to try and get settlement funding, but this is not usually a problem since the funding companies really do their research before funding any pre-settlement case.

Drawn Conclusions About Pre Settlement Funding…

Buyer beware. The Pre-settlement companies are in this to make a buck. They will not give you nearly as much as you would make on a deal but it does offer you the security of knowing that you are taken care of financially, whatever the result of the trial.

By Chris Chandler – Christian Ebuy.com – The Christian Business Guide.

Categories : Legal, Money

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