Lawsuit Cash is a form of funding in which a plaintiff can access a portion of their future lawsuit settlement in advance. The plaintiff can turn the potential future settlement into cash before the case settles.
The cash can be used for necessary living expenses such as food, rent, mortgage, gasoline etc. Upon settlement and distribution of the legal claim proceeds, the lawsuit cash will be paid back to the finance company along with fees that have accrued.
Cash from the settlement can be used to payback the lawsuit cash advance and if the legal claim is unsuccessful then the lawsuit cash does not have to be paid back. Lawsuit Cash is not a loan and the person that receives the lawsuit cash is not responsible for repayment of the advance. Only if and when the legal claim settles will the lawsuit cash need to be repaid with accrued fees.
Lawsuit Cash is usually applied for based on the merits of a personal injury or worker compensation legal claim, however, civil rights, wrongful termination, FELA, Jones Act, Slip & Fall and manny other case qualify for lawsuit cash advances.
The funding company will review the legal claim or “underwrite” the case to determine the likelihood of a successful outcome and how long it will take to settle. With this analysis the funding company can offer lawsuit cash to the plaintiff who is pursuing the legal claim. No credit checks or income verifications are required since the repayment of the advance is strictly based on the merits of the legal claim.
In many cases the plaintiff will apply for lawsuit cash when they are not happy with the settlement offer from the insurance carrier. The immediate cash allows them to meet decline the initial settlement offer and hold our for a higher settlement.
The lawsuit cash advance also enables the plaintiff to meet immediate and necessary living expenses while they wait for the final settlement. As with any financial transaction a person must determine the value of receiving funds today in return for repayment of higher funds down the road.
Lawsuit cash does come at a cost. The fees are generally inline with credit card fees or other unsecured loans offered to consumers. If the ultimate higher settlement offer is greater than the fees being charged by the finance company then the lawsuit cash may be worth the money.
Things to Consider before Applying for Lawsuit Cash
- How long with my case likely take and what will be the payback at that time?
- Do I have access to a line of credit or family members to avoid paying for lawsuit cash?
- Will a higher settlement offer down the road likely outweigh the fees being charged?
- Are you using the funds to immediate and necessary living expenses? If not, don’t apply!
- Is the company that I am applying with an actual funding company?
Upon entering into any transaction as a consumer, you should know exactly what you are getting into. Fortunately with lawsuit cash, you will not get into a cycle of debt or mountain of debt since it is only repayable when there are settlement dollars to be distributed.
Lawsuit Cash Fees
There is a cost to everything, including money! Below we outline the fees that you will encounter and should understand before accepting a cash advance.
- Monthly Fees. They can range from 2.99% to 4.99% per month.
- Minimum Fees. They can be a time frame (six months) or an amount (20 – 25% of the advance).
- Money Transfer Fees. Check these. Some companies charge $50 to send $500!
We all know that unsecured consumer advances have risk and the fees must reflect this; however, it is still important to be diligent and understand them before taking a lawsuit cash advance.
Negatives associated with Lawsuit Cash
It is more important to consider the potential negatives of entering into a transaction than to just look at the positives. We need to address some of the potential negative situations that can occur after you have taken lawsuit cash.
- If you take too much cash from you settlement then you may be dissatisfied with the “net” funds you receive after attorneys’ fees and finance charges!
- If your settlement is lower than you expected then you may not get enough out of the actual settlement!
- If the personal injury case takes longer than expiated then you may pay more in finance charges.
- If you end up taking the case to trial because you didn’t have a high enough settlement offer then you could lose and receive zero!
Lawsuit cash can be an excellent way for plaintiffs to access cash before their lawsuit settles! Just make sure you do some due diligence before you actually accept the money.