May 3rd, 2010Pre-Settlement Advance
A pre-settlement advance funding usually come as a form of non-recourse cash advance. It is given to an injured person with a promise to repay the advance after settling the lawsuit.
This settlement funding is classified as a “non-recourse” funding, the injured person is not bound to pay the advance given should he or she gets unsuccessful in the lawsuit. However, he or she may be asked to pay a portion of the amount in the event that the settlement is smaller than hoped.
Non-recourse funding is a very risky deal that is why the fees associated with pre-settlement advance funding are a bit high. There are several legal, ethical, and practical issues that should be carefully looked into if you have interests in applying for pre-settlement funding.
This is what happens. An injured person calls a financing company that caters to pre-settlement funding cases under the supervision of his or her lawyer. A finance office from that company will contact the lawyer and will ask for some information about the case. From that piece of information, the company will then come up with an estimated value of a likely settlement or verdict.
The company then offers the injured person a pre-settlement advance based on their estimates. The fee can get as flat as a tire, or can be paid on a monthly basis as a loan. After the case settles or when the defendant pays after losing in court, the loan and other fees are paid to the finance company.
The injured person is free of the paying obligation if the lawsuit is unsuccessful – this is one of the perks of having the settlement funding being counted as a form of non-recourse funding. If the total value of the settlement is less than what was anticipated, the injured person might be asked to pay a portion of the amount but not more than what he or she received. And because of this risk and for other legal purposes, a pre-settlement cash advance is not classified as loans.
This type of funding is a great help especially when the case takes a long time sitting on the court’s desk. Litigation takes a very long time, and can sometimes drag on for years. While the case is still pending, even when the attorney is paying all of the legal expenses in during the litigation process, the injured person has to have enough money.
If the injured person is unable to find work because of his or her condition, or has fees to pay associated with the injury, waiting for the court’s decision and for the settlement or verdict money is not a very good option.
A lawsuit cash advance can really assist ends meet while you are waiting for you settlement. There are a lot of dependable business that are able to impart you with pre-settlement funding in your time of need.