Pre-Settlement Funding – Litigation Financing Is An Option
Due to the recent downturn of the economy, pre settlement funding is being requested by clients at a staggering rate. As the state of the economy worsens, this number is likely to climb even higher. People are finding themselves short on money for bills and other necessities, and are looking at pre settlement funding as a way to lighten their burden.Accidents often result in personal injury or property damage, sometimes resulting in the loss of wages or sales revenues. When you decide to file a lawsuit, it can be very time consuming, sometimes taking years before it is finally resolved. This puts clients in an awkward position, because they sometimes do not receive any compensation until they win the case, or it is settled out of court. Lawsuit funding provides the client and their attorney cash while waiting for the case to be settled.Litigation financing companies are becoming increasingly popular within the legal industry because so many clients need assistance while waiting for their lawsuit to be settled. If you are contemplating filing a lawsuit and don’t completely understand these terms, this information will give you a clearer picture of how pre settlement funding works.Once you decide to file a lawsuit, your attorney may advise you to contact a litigation financing company. This happens frequently, especially when the client files against a large company or corporation with large financial backing. Big corporations aren’t usually short on money, and they realize that the longer they can drag out your case, the more likely you are to settle for less money.When a litigation financing company funds you with the money you need, it is not considered a loan. Pre settlement funding is an arrangement between the lending company and the plaintiff. When you, as the plaintiff, borrow money it is with the understanding that if you win your case, you will repay the funding company an agreed upon amount. If you lose, the money will never have to be repaid. When you hire an attorney, it is normal to pay a contingency fee. This fee is usually a percentage of the winnings, and if you do win your case the attorney is the first person to receive compensation. You, as the client, will receive the rest of the money if you do win your case. If you do decide on pre-settlement funding, your attorney will be paid his portion of the proceeds before the litigation finance company receives theirs. Companies who provide lawsuit funding take the risk of losing money. They realize that if the client loses their case, they will not be paid back the money that was funded to the client. Litigation finance companies know that this could be the outcome when they offer lawsuit funding to clients.If you have or are considering filing a lawsuit but are afraid you don’t have the money to do so, discuss pre-settlement funding with your attorney.