Settlement Loan FAQs
Welcome to the lawsuit pre settlement loan frequently asked questions archive by Legal Settlement Loans. This section contains all the common questions and answers a plaintiff would have regarding settlement loans. If you can’t locate the answer to your question in this archive or anywhere else on Legal Settlement Loans you can “contact us”. Below is a list of all the questions answered in this archive. Just simply click on a question and you’ll be dropped down to the answer on this page.
- What is a Settlement Loan?
- Is a Settlement Loan Really a Loan?
- Can my Attorney Give Me a Settlement Loan?
- What Type of Cases Can Get Settlement Loans?
- How Do I Repay My Loan If I Win?
- Are There Any Up Front Costs?
- Does the Defendants Insurance Company Get Notified?
- How Will My Attorney Feel About This?
- Do I Need Good Credit for a Settlement Loan?
- How Much Money Can I Get?
- Are There Limits On What I Can Use the Money For?
- Can’t I Just Get a Regular Bank Loan?
What is a Settlement Loan?
A settlement loan is an advance on a pending lawsuit. The amount given in the settlement loan is less than the actual pursued amount in the pending lawsuit and is usually less than 10%. Settlement loans are not like traditional loans. You do not need a credit check, employment history or a specific income amount.
Is a Settlement Loan Really a Loan?
No, a settlement loan is not like a traditional loan. If you do not win your lawsuit case you will not have to pay back anything to the provider of the settlement loan. This does mean you’ll need a strong case in order to receive a settlement loan. Almost all frivolous lawsuits will not be approved for a lawsuit loan.
Can My Attorney Give Me a Settlement Loan?
No, beyond case expenses the American Bar Association prohibits attorneys from lending money to clients. This helps prevent a conflict of interest arising between the attorney and the client. For example, if you owed your attorney money you might accept advice to settle your case for a lower amount then you really wanted.
What Type of Cases Can Get Settlement Loans?
Majority of lawsuit case types can get a settlement loan. Due to the large amount of different types of cases you would need to review our Types of Cases article to review a full list of known cases that settlement loan providers accept.
How Do I Repay My Loan If I Win?
This can vary between settlement loan providers, usually there is a written agreement between the provider and your attorney; which is used to over see how the funds are dispersed after the case has ended. Contact your attorney regarding the best method.
Are There Any Up Front Costs?
This can vary between settlement loan providers; to our knowledge most respectable providers do not charge any fees in the application process. However, you will probably incur charges with your attorney when they consult with him regarding your current case, its status and merit.
Does the Defendants Insurance Company Get Notified?
No, due to issues with privacy and possible corruption of the law suit itself the settlement loan providers will only contact you and your attorney regarding your settlement loan. This would be an unethical practice and if any provider requires this you should look for another ethical settlement loan provider.
How Will My Attorney Feel About This?
Your attorney will most likely be sympathetic to your financial situation. In fact, when a client gets a settlement loan the client tends not to settle for a less amount due to any financial issues and allows the case to obtain its maximum amount. If you and your attorney have a contingency agreement it may interfere with a settlement loan. Discuss this with your attorney if you think an issue may arise.
Do I Need Good Credit for a Settlement Loan?
No, a settlement loan is not a traditional loan. Your credit history does not affect your chances of getting a settlement loan. However, bankruptcy may be an issue and you should notify your settlement loan provider about it.
How Much Money Can I Get?
This will vary from each settlement loan provider. We’ve seen percentages around 10% to 25% of the projected case value. In dollar amounts it can range from $250 to $1,000.000 total cash value. Do you research, finding the right settlement loan provider can achieve you more money at less cost.
Are There Limits On What I Can Use the Money For?
No, you are free to spend the money on whatever you’d like. This can be affected if you have any standing agreements with your attorney; you may have to pay a percentage of the settlement loan out to them. Please consult with your attorney about this before spending your settlement loan.
Can’t I Just Get a Regular Bank Loan?
Financial institutions do not lend money on the merits of a pending lawsuit. To a normal financial institution backed by consumer funds the concept of litigation financing is too risking.
