Lawsuit Loans - 3 Things You Must Know About Lawsuit Loans
If you have heard the term lawsuit loan and want to know what it is all about, then you will want to read this article. Specifically, I will discuss the options that people who are in need of getting...
If you have heard the term lawsuit loan and want to know what it is all about, then you will want to read this article. Specifically, I will discuss the options that people who are in need of getting an advancement to file a lawsuit have available to them. After reading this article, you should be familiar with what lawsuit loans are, and be able to decide if you need to raise capital before filing a lawsuit.
Lawsuit loans are technically called litigation funding. This is where people who are filing lawsuits receive money from private investors (or certain kinds of firms), who in return take out a lean against the proceeds that may be rewarded to the person. The idea is that certain people need money available to them in order to file a strong lawsuit and there are investors who will give them money now for a cut on the final settlement.
The reason a lawsuit loan is technically not considered a loan, but litigation funding, is if the lawsuit is not successful and no claim is rewarded then the person bringing suit does not have to pay back the loan to the investor of the firm. In other words, it's what's known as non-recourse debt.
Litigation funding isn't just limited to the plaintiff bringing suit but is also available to attorneys. There are plenty of funding companies who are ready and willing to advance money to attorneys in exchange for percentage of the legal fees they anticipate to be earned during the suit.
Lawsuit loans are typically awarded to those who file personal injury suits, but this is not the only time these take place. Also, they are available during commercial litigation and in certain patent cases. Oftentimes, the firms who are willing to award a lawsuit loan will review your case in advance and give you an answer whether they are interested in funding you.
You can find different firms who are willing to give litigation funding by doing a search on the Internet. Oftentimes, they will be able to review your case and give you an answer in less than 24 hours.
In conclusion, you should now understand the basics of lawsuit loans and who they apply to. This may be a useful option if you're bringing suit for a personal injury, or other claims where you expect to be awarded a large sum but currently don't have proper funding.
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