When you’re in the midst of a personal injury lawsuit, facing a denied application for legal funding can be distressing. Legal funding is crucial for covering daily living expenses and medical bills while waiting for a settlement. Receiving a denial can create uncertainty and anxiety about how to manage expenses.
One reason plaintiffs may face denial is if their case lacks strong evidence of liability or damages. Legal funding companies prioritize cases that are likely to result in a successful settlement. Additionally, if the requested funding amount is excessive in relation to the expected settlement, this may lead to denial. It’s important to accurately assess the amount needed and present a reasonable request to increase the chances of approval.
To address a denial, it’s crucial to review the reasons for rejection provided by the legal funding company. This can provide insights into areas that need to be strengthened in the application. Seeking guidance from your attorney to bolster the case’s strengths and reapplying with an adjusted funding amount may improve the chances of approval. Remember, each denial is an opportunity to learn and refine the application to secure the financial support needed during this challenging time.
Reasons for Denial of Legal Funding
One of the major reasons plaintiffs are denied legal funding is due to resource limitations faced by civil legal aid organizations. According to recent reports, the majority of low-income Americans seeking legal aid from Legal Services Corporation did not receive sufficient legal assistance for their civil legal problems. More than 60 percent of the estimated 1.9 million civil legal problems went unresolved. Overall, it’s estimated that 92 percent of civil legal problems faced by low-income Americans lack adequate legal assistance.
Legal aid organizations also prioritize cases based on the type of legal issue, focusing on critical areas like housing, family law, and consumer issues, which can lead to denials for less prioritized issues. Additionally, many plaintiffs opt to represent themselves (pro se) due to the inability to secure legal funding, but the complexity of legal procedures and the need for proper documentation often result in denial of their claims. Plaintiffs who cannot afford filing fees can apply for in forma pauperis status, but this does not waive all costs and can still result in denials based on financial criteria.
Lack of Attorney Representation
One of the most common reasons plaintiffs are denied legal funding is because they need an attorney representing them. Legal funding companies rely on the expertise of your attorney to build a strong case and maximize your settlement potential.
With an attorney, your chances of winning your case and receiving a substantial settlement are significantly higher. In our experience, unrepresented plaintiffs are much more likely to be denied funding.
Even if you do have an attorney, issues with their responsiveness or cooperation can also lead to denial. If your attorney fails to provide the necessary documentation or sign the funding contract, the legal funding company may be unable to approve your application.
Insufficient Case Merit or Documentation
Legal funding companies carefully assess the strength and validity of your lawsuit before approving funding. They need to be confident that your case has merit and a high likelihood of success.
If your case needs more evidence or key documents are missing, such as police reports or medical records, the funding company may only accept your application. They simply need more information to determine the strength of your case.
We’ve commonly seen cases denied due to unclear liability or insufficient documentation. It’s crucial to work closely with your attorney to ensure all necessary evidence is gathered and presented to the funding company.
Regulatory Restrictions in Certain States
Unfortunately, some states have laws or regulations that prohibit or severely limit legal funding. If you reside in one of these states, you may be denied funding regardless of the merit of your case.
States like Arkansas, Colorado, Maryland, and West Virginia have particularly restrictive laws surrounding legal funding. These regulations are designed to protect consumers but can also make it difficult for plaintiffs to access the financial support they need.
Before applying for legal funding, it’s essential to research the laws in your state and understand how they may impact your eligibility. The loan representatives at Mayfair Legal Funding can help you navigate these regulations and determine your best options.
Excessive Previous Funding
If you’ve already received significant funding from other legal funding companies, you may be denied additional funding. Legal funding companies assess the remaining value of your potential settlement and determine whether there is room for further advances.
For example, let’s say your case is expected to settle for $100,000, and you’ve already received $50,000 in funding from another company. In this scenario, a new funding company may determine that there isn’t enough remaining settlement value to justify additional funding.
It’s important to be transparent about any previous funding you’ve received when applying for a new advance. Hiding this information will only lead to problems down the line.
Financial Liabilities and Liens
While your credit score isn’t a factor in determining your eligibility for legal funding, outstanding financial liabilities can still impact your application. Legal funding companies will review any liens, bankruptcies, or child support obligations to assess your overall financial situation.
If you have substantial unpaid debts or legal judgments against you, the funding company may be hesitant to approve your application. They want to ensure that there will be sufficient settlement funds available to repay the advance.
The good news is that once you resolve these outstanding liabilities, you can reapply for funding. It’s always possible to get your financial house in order!
Premature Case Stage
Legal funding companies prefer to work with cases that have progressed beyond the initial stages. If your lawsuit was filed very recently or the incident occurred just days or weeks ago, you may be denied funding.
In the early stages of a case, there may not be enough evidence or documentation available for the funding company to make an informed decision. They need time to thoroughly investigate the incident and assess the strength of your case.
We may be biased, but we recommend waiting until your case has developed further before applying for funding. This will give you the best chance of approval and ensure you receive the maximum advance possible.
Takeaways and Next Steps
If you’ve been denied legal funding, keep hope! There are steps you can take to improve your chances of approval in the future.
First, make sure you have a reputable attorney representing you. Their expertise and cooperation are essential to the funding process.
Next, gather all necessary documentation and evidence to support your case. The more information you can provide to the funding company, the better.
If you have outstanding financial liabilities, work to resolve them as quickly as possible. This will demonstrate your commitment to financial responsibility and improve your eligibility for funding.
Finally, consider contacting Mayfair Legal Funding for assistance. Our experienced team has a high approval rate and can guide you through the funding process from start to finish!
Remember, a denial today doesn’t mean a denial forever. With persistence and the right approach, you can secure the legal funding you need to support yourself and your family during this challenging time.
Get the Lawsuit Loan that You Need with Mayfair Legal Funding
At Mayfair Legal Funding, we understand the challenges plaintiffs face when seeking legal funding. That’s why we work tirelessly to approve as many applications as possible and provide the financial support you need to pursue your case with confidence.
Our streamlined application process and fast approval times mean you could have cash in your hand in as little as 24 hours. And with advances ranging from $500 to $250,000, we can accommodate a wide range of funding needs.
Don’t let a denial from another company stop you from getting the support you deserve. Contact Mayfair Legal Funding today at (888) 357-1338 to learn more about our legal funding options and start your application. Our experienced team is here to help you every step of the way!
