Understanding the concept of pre-settlement loans

Understanding the concept of pre-settlement loans

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Many people get involved in injuries every day as they occur quite frequently. Lawsuits are filed for different reasons including personal injury, neglect, wrongful death, civil rights, accidents, worker’s compensation etc. However, many people who sustain the injuries obtain financial assistance through settlement and lawsuit loans to survive during the troublesome time. In a pre-settlement loan concept, the lending company consisting of investors buys an interest in the pending lawsuit. This way the plaintiff obtains the cash advance that helps them to continue the litigation. Though the whole process appears to be quite simple yet there are several conditions which the individuals should be familiar with.

Due to the risks involved in the pre-settlement loans, the lending company charges a fee to allow the plaintiffs access the cash prior to the settlement. Many individuals mistake this as the interest rate. There are no interest rates applicable to the settlement funding. The fees are based on the risk involved in the claim. If the plaintiff does not win the case, there is no question of repayment of the loan advanced to him. Thus the individuals get great comfort at the time of financial distress. For instance, if a person suffers an injury due to a car accident, he can avail accident loan company NYC until the time the case is settled.

Benefit to both the parties- Attorney and client

Lawsuit funding or pre-settlement funding is the process that provides cash advances to the attorneys and the clients based primarily on the merits of the pending settlement. The pre-settlement advances are the cash advances on a pending litigation. The funding company assigns a part of the client’s interest in the pending lawsuit in the form of cash advances. There is no repayment in case of no-recovery. The benefits of the attorneys to refer the pending lawsuits to the funding companies are many like easing the financial burden, providing instant financial assistance during the difficult times and being able to fight for a better settlement.

The whole process of pre-settlement advance is quite simple. A two-page application is needed to evaluate the merits of the pending litigation. A decision is given within a day or two from the day of receiving the application supported by documents. The client has to decide whether he wants to proceed or not. If the client agrees to proceed, a contract is forwarded to the attorney directly for review that outlines the transaction, rates and fees, process, and how the client shall receive the money. When the settlement amount is disbursed by the funding company the attorney is asked to honor its lien.

What are post-settlement advances?

Post-settlement advances are the cash advances on the settled lawsuits. In the majority of the cases, payments are delayed because of the delayed approval of the court order, judgment resolution, Medicare resolution, and insurance issues. The process of post-settlement advance is more streamlined than the pre-settlement process. This is because after a case is settled, the agreement releases the settlement amount, client’s share, and the attorney’s fee. It benefits the clients by providing them immediate finance for meeting the daily expenses and in providing the attorneys with cash to help them to continue their practice. One can approach an accident loan company NYC for post-settlement advances.

 

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