11 Jan Misconceptions of Legal Funding
Legal funding is the fastest emerging financial trend in the U.S. justice system. Even if you’ve never filed a lawsuit, you’ve probably heard of it. Sometimes referred to as legal settlement loans, pre-settlement funding, or legal finance loans, these financial products are a great way to finance your lawsuit and cover legal costs. However, there are many misconceptions surrounding them. Here are some of the most common ones.
Pre-Settlement Cash Advances Must Be Paid Back No Matter What
Funding for lawsuits is an advance and it requires no monthly payments or upfront fees. In case your settlement doesn’t cover the advance or you lose, the legal funding company cannot go after you.
There is no monthly bill or any other recurring expense with this type of cash advance. This means you will not be in a worse financial situation after getting an advance, regardless of the outcome of your case. On the other hand, if you get a loan, you will need to repay it regardless if you win the case or not. In addition for being a non-recourse loan, it has other advantages over bank loans. Bank loans have more requirements for approval and they actually create new monthly bills you’ll need to take care of.
Getting Cash for Lawsuits Is Difficult
While it’s true you will need to take care of some paperwork to get legal funding for lawsuits in Tampa, the entire process is pretty straightforward. In fact, no credit checks or employment verification are required. The only factor affecting the funding is the likelihood of winning the case.
It Takes Forever to Get the Cash Advance
Most companies will deliver the advance in as little as one or two days after you apply, while some companies will get you the money in a matter of hours.
You Are Better Off Getting Cash from Your Attorney
This couldn’t be any further from the truth. In fact, it’s considered unethical in most cases for attorneys to loan or give money to their clients. Of course, there are exceptions, such as only paying for litigation costs. In all other cases, your attorney may actually face professional discipline for not adhering to codes of conduct.
Getting Legal Funding will Make Getting a Fair Settlement Difficult
Most people believe that the companies that provide funding will pressure their clients to settle early to get their money back as soon as possible. However, they are not allowed to get involved in the cases they fund. Not only that, but it’s in their best interest to ensure the largest possible settlement, not the quickest.