Cash for Settlement

Advance Cash Settlement

24 05 2010 Comments Off on Advance Cash Settlement

The term “advance cash settlement” is commonly used to refer to a form of pre-settlement lawsuit money, not settlement loans, but an advance fee, type of venture capital or investment. While real line of credit or actual loans may be accessible to finance lawsuits, those alternatives are normally reserved to law firms and lawyers. The claimant in a personal injury case who plans to procure a cash advance against the settlement or verdict in a lawsuit will not typically be offered as a loan, but will be presented with “no recourse lawsuit money or funding”.

The chief benefit of this kind of lawsuit financing is that it bears no risk to the claimant – particularly if the lawsuit settles less than the cash advance amount, or if the defendant eventually wins and there is no recovery provided, the claimant or plaintiff has no responsibility to the lawsuit funding firm more than the claimant’s own share of any recovery fund. The lawsuit loan’s fees can be substantial, since they are prearranged to steer clear of usury laws, thus, they should only be considered as a final resort for litigation financing.

Can You Borrow Money from Your Lawyer?

Because of the issues about creating conflict of interest in a lawyer-client relationship, although an attorney can advance the litigation costs, a lawyer cannot provide or lend money to a client. The chief concern is that if a client borrows money from the lawyer, the lawyer might focus on recovering the borrowed money instead of the case, which may be conflicting with the client’s best interest. However, a lawyer is not prohibited to refer a client to a financial institution or a lender who can furnish a loan and help the client recompense the expenses during the lawsuit proceedings.

Lawsuit Financing Sources

If a plaintiff in a physical injury lawsuit does not prefer to acquire no-recourse lawsuit funding, because of the expensive transaction fees associated to it, the claimant may opt to use other forms of loans. For instance, if the claimant has home equity, instead of settlement cash advance, home or mortgage equity loan can be used to cover certain expenses, which took place before the lawsuit settlement. It may be feasible for the claimant to get a line of credit or a personal loan. It is also possible that the plaintiff can borrow money from family or friends. In some instances, it may be cheaper to just max out the credit cards than to obtain pre settlement cash from a company that focuses on litigation financing.

Is a Lawsuit Loan Beneficial to You?

There are clients with no other choice but to get cash for settlement, even at pretty high cost. At times, there are no other means to secure funding, and the client must have money to pay for mortgage or rent, medical bills, health care, or even to purchase food. If a personal injury petitioner is in dire need of funds, it may be helpful to take advance cash settlement. However, it is most beneficial to involve a lawyer in this procedure, both in finding the best lawsuit funding firm and in having the agreement with the lender assessed and reviewed by the lawyer before execution.

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