Finding the right lender or type of lender for lawsuit funding is sort of like shopping—loan companies are all different in the products and services they have to offer. What you may not realize is that there are companies specifically for people who are going through a lawsuit. You don’t have to go to your bank for a loan if you are experiencing financial hardships during the course of a lawsuit or claim. There are a few basic questions plaintiffs should know the answer to before making any decisions.
When is the loan repayment expected?
This is an important question to ask, especially if you’re using a traditional loan. If a claimant takes out a traditional loan, then repayment might be expected before the trial reaches a settlement. There’s no way to know when you’ll be able to pay, but banks will expect payment on a certain date. This is a good question to ask before you take out any kind of loan, even if the answer looks like it should be obvious. An example is a paycheck advance: you know that you have to repay it when you get your next paycheck, but what about the fees? Will you be able to give up your next paycheck and then pay additional money for the fees? One of the great conveniences of lawsuit loans is that payment is expected after a settlement has been reached, which means that you know you’ll have the money when you need it during the course of a lawsuit or claim. Payment is expected whether or not you are awarded a settlement.
What exactly will the interest and other fees be?
Along with knowing when your payments are to be made, you should also know what your payments are. It seems obvious, but you would be surprised how many plaintiffs find themselves in hot water because they signed papers without being completely clear on what they will be paying. “Hidden fees” are a concern with consumers when it comes to cell phone carriers, gym memberships, and other services, and plaintiffs should be concerned when it comes to settlement funding as well. Make sure your payments are explained to you before you reach an agreement. Fees and the total loan amount are judged on a case by case basis, so it’s difficult to say what kind of fees you should expect, but the most important part is that you understand what you’re paying.
What can the money be used for?
The answer for most companies would be that you can use the money however you want, but, depending on the company, there could be restrictions, so it’s a good question to ask before you reach an agreement. The company may face legal restrictions that you’re not aware of. Make sure you’ll be able to use the money for medical expenses, household bills, and other necessary ways to sustain your standard of living. If you’re utilizing lawsuit funding, you should be able to use your money for all of those things.
What’s required from me after the papers are signed?
The answer to this question will typically be: not much. But you should ask this question because loan companies have a vested interest in your case, so you should be prepared for update requests. Most reasonable requests include periodical calls to your attorney to find out the status of your case.
About the Author: Steven Medvin is the Executive Director of SMP Advance Funding, LLC, which provides lawsuit funding to individuals who need a lawsuit loan for pending lawsuits. For more information please visit www.smpadvance.com.