Legal funding, also known as lawsuit loans, can be a real game-changer for people caught up in legal battles and facing financial hardships. This kind of funding provides a much-needed helping hand by offering support for everyday expenses, medical bills, and other financial burdens while waiting for a settlement. For many, legal funding is a crucial lifeline that allows them to stay on top of their finances and keep fighting their case without having to sacrifice their financial security.
The process of obtaining legal funding is relatively straightforward. Once you apply for legal funding, the funding company will review your case to assess its strength and the likelihood of a favorable settlement. If your case meets the criteria, the funding company will offer you a cash advance, which is repaid from your settlement proceeds.
One of the key benefits of legal funding is that it levels the playing field for plaintiffs who may be facing well-funded defendants. Without legal funding, plaintiffs may feel pressured to accept a low settlement offer due to financial constraints. With legal funding, plaintiffs can afford to wait for a fair settlement, ensuring they receive the compensation they rightfully deserve.
What is Legal Funding?
Legal funding is a type of financing that provides cash advances to plaintiffs in exchange for a portion of their future settlement or court award. It’s designed to help plaintiffs cover their expenses while pursuing a legal claim without having to resort to traditional loans or credit.
Other Names for Legal Funding
Legal funding goes by many names, including:
- Lawsuit Loans
- Pre-Settlement Funding
- Settlement Advances
Despite the term “loan,” legal funding is not a loan in the traditional sense. Unlike loans, legal funding is non-recourse, meaning you only repay the advance if you win your case.
How Does Legal Funding Work?
Understanding legal funding involves delving into various intricacies, beginning with the comprehensive application process and ending with the allocation of funds.
The Application Process
To apply for legal funding, you’ll need to provide details about your case to the funding company. This typically includes information about the type of case, the expected settlement amount, and the strength of your claim. The great thing about legal funding is that no credit checks or employment verifications are required.
Case Evaluation by the Funding Company
Once you’ve submitted your application, the funding company will assess the strength and potential value of your case. They’ll look at factors like liability, damages, and insurance coverage to determine how much funding they can offer you. In our experience, funding companies typically offer advances ranging from 10-20% of the expected settlement amount.
Receiving the Funds
If your application is approved, you can expect to receive your funds quickly, often within 24-48 hours. The money is usually sent via wire transfer or check, so you can access it right away and start covering your expenses.
Repayment of the Funds
One of the best things about legal funding is that you only repay the advance if you win your case. The repayment comes directly from the settlement or court award, so you don’t have to worry about making monthly payments or going into debt. If you lose your case, you owe nothing!
Benefits of Legal Funding
Understanding the advantages of legal funding can help illuminate why it’s a valuable choice for individuals navigating the intricacies of a lawsuit. Here are some of the advantages provided by legal funding:
Covering Living Expenses During the Legal Process
Lawsuits can take months or even years to resolve, and many plaintiffs struggle to cover their basic living expenses during this time. Legal funding can provide you with the cash you need to pay for things like rent, mortgage, utilities, and food so you can focus on your case without worrying about financial stress.
Supporting Financial Stability
Legal funding, also known as lawsuit loans or third-party litigation financing, has grown significantly in the U.S. since around 2010. This type of financing is split into commercial and consumer funding. Commercial funding involves substantial amounts of money, often millions of dollars, provided to corporate litigants or law firms. Consumer funding, on the other hand, involves smaller amounts (usually under $10,000) given to individuals, often for personal injury cases or other similar legal matters. This financial support is crucial in helping plaintiffs manage their living and medical expenses while awaiting settlement.
Paying for Medical Treatments and Rehabilitation
If you’ve been injured and need ongoing medical treatment or rehabilitation, legal funding can help cover those costs as well. You shouldn’t have to choose between getting the care you need and paying your bills.
Leveling the Playing Field Against Insurance Companies
Insurance companies often try to take advantage of plaintiffs who are in financial distress by offering lowball settlements. With legal funding, you can afford to hold out for a fair settlement and level the playing field against well-funded defendants.
Types of Cases Eligible for Legal Funding
Here are some common types of cases where legal funding may be available:
Personal Injury Cases
Personal injury cases are some of the most common types of cases eligible for legal funding. This includes things like:
- Car Accidents
- Slip and Falls
- Medical Malpractice
Employment Lawsuits
If you’re involved in an employment lawsuit, such as a case involving:
- Wrongful Termination
- Discrimination
- Harassment
Legal funding can help you cover your expenses while you pursue justice.
Civil Rights Cases
Legal funding is also available for civil rights cases, such as police brutality or discrimination claims.
Mass Torts and Class Actions
If you’re part of a mass tort or class action lawsuit, legal funding can provide the support you need to see the case through to resolution.
Choosing a Legal Funding Company
Choosing a legal funding company is a significant decision that can impact your financial well-being during the course of your lawsuit. It’s important to consider various factors to ensure you’re working with a reputable and reliable provider.
Reputation and Experience
When choosing a legal funding company, it’s important to look for one with a solid reputation and experience in the industry. Look for companies with positive reviews and a track record of success.
Transparency in Fees and Interest Rates
Legal funding can be expensive, with high fees and interest rates. Look for a company that is transparent about its costs and willing to explain them clearly.
Attorney Recommendations
Your attorney may have experience working with legal funding companies and can provide recommendations based on their past successes. At Mayfair Legal Funding, we work closely with attorneys to ensure a smooth funding process for their clients.
The Bottom Line on Legal Funding
Legal funding can be a lifeline for plaintiffs who are struggling to make ends meet while pursuing a legal claim. By providing access to cash when you need it most, legal funding can help you level the playing field against well-funded defendants and achieve a fair settlement.
However, it’s important to carefully consider the costs and terms of legal funding before signing an agreement. Look for a reputable company with transparent fees and interest rates, and be sure to consult with your attorney before making a decision.
At Mayfair Legal Funding, we pride ourselves on providing fast, easy access to legal funding at competitive rates. Our experienced team will work with you and your attorney to ensure you have the support you need to pursue your case with confidence. If you have any questions about legal funding or would like to apply, please don’t hesitate to contact us at (888) 357-1338.
Takeaways and Next Steps
If you are thinking about taking out a settlement loan, here are some important points to consider and steps to take next:
- Legal funding can provide financial relief during a lawsuit, allowing you to cover living expenses, medical bills, and other costs.
- Research and compare funding companies before applying, looking for reputation, transparency, and attorney recommendations.
- Settlement loans should be approached with caution due to potential high costs and risks. Even though they can provide much-needed funds, it’s essential to carefully weigh the pros and cons before considering them for your situation. In 2017, a lender faced accusations from New York’s attorney general and the Consumer Financial Protection Bureau for unethical practices. The lender was accused of exploiting sick 9/11 responders and injured NFL players by charging interest rates up to 250% and collecting high fees, resulting in substantial profits from these loans.
- If you decide to apply for legal funding, be sure to read the agreement carefully and understand the terms before signing.
Get the Legal Funding You Need with Mayfair
If you’re considering legal funding for your lawsuit, Mayfair Legal Funding can help. Our experienced team will work with you and your attorney to provide the financial support you need to pursue your case with confidence. We offer competitive rates, fast approval, and a commitment to transparency and customer service. Contact us today at (888) 357-1338 to learn more and apply for funding!
