What Loan Companies Don’t Want You to Know About Pre Settlement Lawsuit Loans
Like so many daytime television fans, you may have those ever popular commercials about getting a pre settlement lawsuit loan. Although many people simply disregard or completely ignore these commercials, you might be paying close attention to them if you suffered from an injury and are unable to work while the medical bills continue to pile up! For these people and others in similar situations, pre settlement loans can be a one way ticket towards financial recovery and a brighter future. This is just one out of many pre settlement loan benefits, with the most important being peace of mind and a sense of security. That in itself is truly priceless!
Now, for the million dollar question — what exactly is pre settlement loan funding and who can benefit from it? A pre settlement lawsuit loan is a special kind of loan that is given to victims of personal injury with a case pending in court. This allows victims to receive a loan in the anticipated amount of their lawsuit prior to actually receiving it upon a successful ruling in their favor. A pre settlement loan company will work closely with the victim’s attorney or legal team in order to determine what the chances are of a favorable ruling before proceeding with processing the loan requests. Clients typically cannot borrow against the full amount of the loan but rather are allowed to borrow enough to meet their immediate financial and medical needs if the loan is approved.
The victim’s lawyer will work closely with pre settlement loan companies in order to negotiate the loan’s repayment terms on the client’s behalf, including the amount of the loan, its repayment length, as well as the fees and interest rates. If the victim is successful in winning their lawsuit, the pre settlement loan company will then take the portion owed to them from the proceeds. This includes the hefty fines and high interest rates. If on the other hand the victim loses, they are completely off the hook when it comes to repayment of their pre settlement lawsuit loan. In the event the victim wins but their settlement is less than expected, the victim’s lawyer will often step in to negotiate new repayment terms.
Although many people consider pre settlement lawsuit loans to be lifelines, many legal experts encourage people to think and use them as last resorts due to the high cost they come with. If you expect to receive a sizable settlement, a pre settlement loan might be helpful in allowing you to get caught up on your medical expenses and other financial obligations.
But if your settlement is small and you still decide to take out a pre settlement loan, you run the risk of paying the pre settlement loan company more than the actual value of the loan in the long run. Additionally, it’s important to keep in mind that your attorney will still need to be paid out of your court settlement. After paying off a loan and attorney fees, you might not be left with much in the end. As such, pre settlement loans are best suited as absolute last resorts for clients facing major financial challenges such as losing their home.
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