When you pursue a lawsuit, particularly a personal injury one, expenses are bound to pile up on top of the medical bills and everyday necessities. It can especially bite hard when you (or, if you’re an attorney, your client) are incapacitated and unable to work. In that event, it can be a wise decision to pursue pre-settlement financing. Pre-settlement financing is funding borrowed on a future settlement, usually a percentage with a few other charges, that can be applied to expenses during the course of a trial (in particular, medical treatment, though it cannot be used to pay for the lawsuit itself). Pre-settlement financing is not a loan, and if the case isn’t won, no repayment is necessary. For this reason, most reputable finance companies only issue lawsuit financing with the approval of the plaintiff’s lawyer and the sense, honed by years of experience, that the case is winnable.
Apogee has over 50 years of experience providing pre-settlement financing as well as experience with health care, finance, patient services, and the law. Consider that as we share the following blog about what to look for in a reputable pre-settlement funding firm!
Check Up on Them
The first step is an easy one. Look up the name of the firm online, then see what the Internet has to say. Find out what their terms are, the amount of experience the firm and its officers have in the field, and so on. Look at reviews and ratings from previous customers, though take everything with more than a few grains of salt and feel out the truthful reviews versus those left by the company itself or its detractors and competitors. Of course, word of mouth is your best way of finding someone. Ask friends and family to put out feelers and to share their experiences with pre-settlement funding firms. The good firms won’t leave a trail of disappointed clients behind them.
Ask How Soon the Funding Is Available
As mentioned, when you’re pursuing a lawsuit, it’s not because you don’t need the money. After the attorney files the application, the case is approved, and the paperwork is signed and filed, respectable firms can send the money in 24 hours or less. The company or firm should be able to give you a solid idea of when they can provide the money and not leave you twisting in the wind.
They Should Be Comfortable Speaking to Lawyers
Reputable firms should be willing to interact with clients through their lawyers. If a firm tries to do business without the plaintiff’s lawyer present, something shady might be going on. Respectable firms will only issue funding through a lawyer, who will review the agreement and ensure their client is being treated fairly and not taken advantage of. Any avoidance of legal representation is a red flag.
Avoidance of Gobbledygook
While all legal agreements should be reviewed by a lawyer, it’s not out of the question to expect the terms and conditions of a pre-settlement financing arrangement and its conditions to be understandable and to the point. The firm should also be ready and available to discuss and clarify any points of the agreement before it is signed. A reputable firm should have nothing to hide and be professional enough to help one understand what one is getting into.
Of Special Interest
Still wondering what to look for in a reputable pre-settlement funding firm? Get interested in their interest rates when it comes time to repay them. Some experts suggest that if the rate is set above 3.5 percent, you should move on and find a firm with lower rates. Ask how they set interest rates as well and note whether they have a standard rate or calculate interest based on the case and whether a settlement can be achieved. Watch for firms that compound interest rates, and make sure to look for hidden fees and charges. The company should be transparent about what they intend to charge.
With the previous paragraph in mind, it’s important to ensure the lender does not require the plaintiff to pay above and beyond the amount of the final award or settlement. Reputable firms will provide a certain percentage of the final projected settlement and not lend money beyond that amount. It doesn’t serve the client well to trade one form of punishing debt for another. It is also standard practice for the plaintiff not to have to pay the firm back if the case is lost. Any other arrangement may be suspect.
Even if you apply for pre-settlement financing, you are not obligated to pursue it. Should you apply for funding but change your mind and neglect to sign any contracts or agreements, you remain free and clear. Some agencies, however, may attempt to use high-pressure sales tactics or claim that you are legally obligated to pay them back for money you never borrowed because you originally approached them. This is not true and should be immediately reported to your attorney. Do not respond or pay anything, or you may find yourself in an endless loop of demands for money.
As mentioned, pre-settlement funding isn’t a loan. You’re borrowing on the projected settlement in advance, so no credit report or background check is required. The firm providing the funding should only be interested in the specifics of the case and not be fishing for private financial or similar information. Financing should be based entirely on the merits of the case and the likelihood of reaching a settlement.
Works Well With You and Your Attorney
Like any business arrangement, the firm should be ready to help you and answer any questions and be prepared to meet and discuss terms as things change (or don’t change) with the lawsuit. Flexibility is key, and while both parties should adhere to the stipulations of the agreement, both should also be ready to make adjustments if, say, the lawsuit turns out to take longer than originally envisioned.
If you’re interested in learning more about pre-settlement financing, contact us any time by calling (877) 410-3343 or by email at firstname.lastname@example.org. We are a Florida firm but look forward to speaking with you and your legal representative soon.