In Parts 1 and Two, we discussed the ways in which plaintiffs could assess both the benefits and liabilities that accrue when pursuing either a lawsuit loan or lawsuit funding. In this article, we will discuss what happens once the pre-settlement loan is obtained.
In what manner are the settlement loans to be repaid? One of the significant advantages of obtaining this form of financial assistance is the fact that there is nothing that has to be repaid unless and until you obtain a settlement. Either the lawsuit loan or lawsuit funding will be repaid out of the settlement proceeds awarded in your case. Repayment, in most cases, will occur at the same time with the settlement awarded in your case.
One of the foremost questions clients present is, “What happens if I lose my lawsuit?” Another advantage of obtaining settlement loans is the fact that they are non-recourse forms of funding. Therefore, if the plaintiff does not prevail in the underlying lawsuit, the plaintiff repays nothing. The funding-entity has already advanced the funds and the funding-entity cannot pursue the plaintiff if the plaintiff does not prevail in that lawsuit.
Clients are often eased to find that there are no limitations as to how the settlement loan may be spent. Many clients utilize such financial assistance to pay their utilities, put food on their tables, etc. However, these instruments are enormously lithe and the plaintiff is free to utilize the proceeds in any manner he/she deems adequate.
Another question we frequently receive is, “If I need more money in the future, am I able to pursue another pre-settlement loan?” The brief reaction this question is, “Yes.” It is possible for the plaintiff to request extra funding out of the initial request. It is also possible for the plaintiff to submit a subsequent request to obtain a settlement loan.
Both plaintiffs and attorneys often want to know if the funding-entity is involved in any way in attempting to direct the case. The reaction this question is, “No!” The funding-entity will have absolutely no control over your case. Their work is done in advance of providing any of the funding. Once the funding is issued, the funding-entity has no further involvement in your case. (Of course, they will be involved once the settlement is awarded.)
It is fairly reasonable that many clients are worried about the manner in which their request for financial assistance will be perceived by their attorneys. It is significant to realize that many attorneys are totally unaware of the fact that such financial-assistance exists. However, many attorneys who are familiar with this form of financing are fairly impatient to assist their clients in obtaining either a lawsuit loan or lawsuit funding to assist them as they pursue their lawsuit.
If you’re presently a plaintiff, have you ever wondered why your attorney can’t just loan you the money? There is little doubt that many attorneys would love to be able to provide financial assistance to their clients. However, attorneys are prohibited from doing so due to the possibility of a conflict-of-interest arising as a result of providing such financial assistance. (It is significant to note, however, that attorneys are often willing to assist their clients with case-related expenses.)
Clients often are worried about the degree of confidentiality when obtaining either a lawsuit loan or lawsuit funding. The process is confidential. In fact, the defendant need not even be aware of the fact that such funding was obtained. However, in some cases plaintiffs may wish to make the defendant aware of the fact that underwriters experienced in such processes, have reviewed the case and have determined that the case, from their perspective, is meritorious. If your case were not meritorious, no funds would be advanced.
Settlement loans often prove to be enormously helpful to plaintiffs. When plaintiffs are hard-pressed financially, they are often antsy to obtain either a lawsuit loan or lawsuit funding. Once such financial assistance is obtained, plaintiffs often find themselves much more certain about being able to pursue the lawsuit until a fair-and-equitable settlement is achieved!