Litigation Funding -
What To Expect and Look For
Legal action is one of the most difficult events to have to deal with, many times litigation funding is very necessary. There is a large amount of money as well as many individual's futures on the line. However, the wrong move in a legal battle can lead to a certain loss. It is important that the plaintiff remain strong throughout the battle as well as fiscally responsible. Financing is available for individuals who require a cash flow while their proceedings are moving forward. Litigation financing also known as a “legal lien” is a loan that can be taken out by a plaintiff in a lawsuit. This loan is taken out against a future judgment in the lawsuit in which the plaintiff is participating. The amount which a plaintiff can request from a financing can vary based upon a number of factors. First, the financing company will want to know the details of the case. This includes what occurred, the record of the attorney and other details. Information may need to be submitted via email, fax or phone. Once this information as well as if there were any insurance policies or settlements is calculated, the financing company will either extend an offer of credit to the plaintiff or suggest that they look elsewhere for funding.
It is advisable to shop around and look at the rates/fees that other companies charge before using the company that your lawyer suggests. Many litigation funding companies will give the attorney a kickback for sending them new business. Funding companies also may not be giving you the best deal because they do not deal with that type of case. Just like lawyers, some financing companies like personal injury cases while others will deal with accidental death. It is all about finding which company will be the best financing company to use for your particular case. Litigation funding companies may charge a set fee plus a monthly finance charge. This charge should be no more than 3% of the balance that you have financed. A company that charges you more is not giving you the best possible deal. It is also important that you look at companies that have an established track record. You do not want to receive a certified check only to find out that the company you are working with is a bunch of criminals themselves! Legal financing can be a great method of resolving your cash flow problems. Plaintiffs in a case receive the money that they need to pay their day to day costs and only have to repay the amount should they win their case. While there are some costs involved, they are not nearly as high as those in other loans. Best of all, litigation financing can be done quickly with little extra work required. Funds that are received as part of your litigation financing are sent directly to you via check or wire and can be used for any expense that you incur.
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