A big concern—if not the biggest concern—of any personal injury lawsuit is money. Not just the settlement you and your lawyers are pursuing, but the costs of living and legal fees as well. If you’ve been injured to the point of finding it difficult to make things meet in the meantime, it might be time to look for funding. While it’s better to speak to friends and family members or other people and institutions who can provide money and the necessities without requiring interest or even repayment, there are sources of revenue that aren’t as dear as banks and other loans.
Pre-settlement funding and personal injury cash advances are options. Pre-settlement funding, also called legal financing (among other terms), is provided by legal financing companies. A litigant or lawyer can apply for a loan which is used to help litigants pay for expenses while they’re in court. In exchange, the company collects a percentage of the final settlement. If the litigant loses, however, the legal financing company doesn’t need to be paid back. Thus, the company is investing in the potential to recoup the money it gives the litigant, plus a bit more. Naturally, legal financing companies carefully assess whether the case is winnable or not before granting the funds. Experience and the facts of the case tell them whether it’s worth pursuing, and if it’s the litigant or lawyer receives the money needed to deal with expenses. It sounds like a good deal, and it might be the wisest choice for a case. But is it like visiting an ATM and getting money whenever one likes? How many times can you get legal funding for your suit?
Is It Free Money?
The short answer is no. The longer answer is you’re borrowing on money that you hope to receive at the settlement of the case. Not winning means you don’t pay, but you are still responsible for any payments, fees, and costs incurred by your injuries or the case. Depending on the agreement you signed and the company you worked with, there may be other expenses as well, so talk over the possibility of pre-settlement funding with your lawyer before pursuing one.
Let’s say your lawyer agrees it’s a viable choice. After applying for the funding, (usually online) you can often have the money wired or deposited to your bank account where it can be used immediately. But let’s come back to the original question: how many times can you do it?
How Much and How Often
Certain institutions that provide legal funding allow you to apply for as many legal funding loans as you like—but it’s not something to enter lightly. Before pursuing a second round of funding, consult with your lawyer. Your lawyer needs to be involved in the process from the beginning since the legal financing company requires certain information and paperwork only they can provide. They may agree that a second loan is prudent or they may not. You will be told that settlements may never need to go to court since they can be negotiated by the parties involved.
On the other hand, cases can also last for years, so every time you seek and receive a loan, you’re drawing off the final settlement—and that can add up. Even if you win, you might be left to pay the remainder of the financing as well as any attendant costs, fees, and interest. So, can you apply for another loan? Yes. Should you? That’s a matter for discussion with your attorney. As for us, here at Apogee Capital Partners, LLC, we don’t overfund. We approve up to 10 to 15 percent of the projected settlement award amount. This way, your clients receive appropriate funding without being saddled with greater payments and usage fees once the case is settled. Your clients need help, not further hindrance!
What Can Stop You From Getting Legal Funding?
Let’s say you apply, but the process isn’t as smooth as the section above makes it out to be. You may be rejected, and there are several reasons why this might happen. For one thing, you need an attorney to apply. You can try to get one on your own, but there’s no guarantee you will, and if you do you might want to question why it was so easy to get without an attorney looking out for you. The amount of funding you seek might be capped, meaning the lender has assessed the outcome of a settlement and determined it’s not worth dispensing more money. The state of your finances might be a factor—in that if you owe on certain things you may not qualify until those debts are settled. Finally, the lender may look at the case and see the that evidence proves it was clearly your fault, and thus the case is unwinnable. But you never know until you apply.
Are There Any Warning Signs To Watch For?
We’ve answered the question, how many times can you get legal funding for your suit? Now we want to tell you what to look out for when you apply. Unscrupulous agencies can pull any number of swindles and tricks. If they’re worth their salt, your attorney will review any contract for hidden fees and high-interest verbiage that might surprise you down the line. Similarly, many experts say that if the company says don’t need a lawyer to set up the loan, then you absolutely need one. Better yet, look elsewhere for your funding. Pressure tactics and the old hard sell are other warning signs. If a company deals with you to the point of harassment during this particularly challenging time in your life, shut it down. If they persist, consult your lawyer and let them know what’s going on. It may well be that the company is not only pushy and off-putting, but they’re operating outside the constraints of your state’s laws.
Ask other questions as well. Have your attorney contact us for a consultation or information-seeking meeting about the services we offer.
