What are Legal Funding Solutions?
Legal funding solutions are specifically designed for plaintiffs who have already filed or are contemplating to file a lawsuit, often in the context of a personal injury from car accidents , work place accidents or similar causes. In the aftermath of a auto accident, the victim and the family often goes through traumatic situations and financial stress compounds their suffering. Legal funding constitutes an option that the victim can pursue to mitigate his/her financial challenges.
How Legal Funding Works
The working of legal funding is simple and straightforward. However, considering that your attorney’s assessment of the suit is mandatory to obtain legal funding, plaintiffs fighting their suit in person may find it overwhelming to meet this condition laid out by legal funding companies. When on the other hand, you have already appointed an attorney, you can consult him/her on your proposal to seek legal funding and request appropriate guidance. Apart from providing the required assessment he/she may also recommend one or more reliable legal funding companies for you to work with. You can then research the companies and negotiate the terms of legal funding. Upon an application fulfilling simple conditions, you are approved quickly and often times, you have the ability to physically clutch the cash in 48 hours or less.
Your Credit Score
A major advantage with legal funding solutions is that they come without the usual credit check or income verification. The merits of your personal injury claim and the attorney’s assessment are adequate to be approved. What is more you will also not be burdened with monthly payments since legal funding constitutes a ‘no recourse loan’ and repayment is against settlement of your lawsuit. If you do not emerge winner in the lawsuit for any reason, the lender cannot recover the loan from you. However, in some exceptional cases, particularly when large sums of money are involved and a rolling credit is sought, additional collateral may be required.
How Much Cash Can I Expect
This is important. Legal funding solutions do not give you the opportunity of a windfall gain. You should peg your expectations at about 20% of your projected settlement amount. Yes, that is right – because most attorneys take away 30% of the settlement considering that in most situations no upfront fee is charged by your attorney and expenses incurred in prosecuting your case are also borne by him/her. Another 30% is set aside to meet medical expenses leaving you with about 40%. Legal settlement funding factors in the costs and interest charges before determining the amount they can put in your hands. Remember also that in the extreme event of the lawsuit being decided in favor of the other party you are not obliged to repay the loan. Yet, legal funding remains a viable option for you when pressing payments like utility bills or credit card payments have to be met on specific dates to safeguard your credit scores or prevent deterioration. In exceptional situations where the projected settlement is large enough legal funding companies may approve rolling credit which may enable you to receive $2,000 or more every month until the settlement is paid out.
About the author
James Sheridan is the Contracts Manager at Pegasus Legal Funding LLC and is responsible for the final stage of the funding approval process. James focus and priority is delivering to PLF’s clients the funds they need as quickly as possible