As consumers wade through the mounds of information available to them, they are bound to come across a few misconceptions. Here are some common lawsuit loan myths busted:
Myth #1: Lawsuit loans are for plaintiffs who are just impatient about receiving their settlement.
Plaintiffs who use lawsuit loans don’t typically seek this type of funding just because they don’t feel like waiting. Lawsuit loan applicants are usually involved in a lawsuit concerning an accident or another incident that was costly to them. Until a settlement is reached, they have to deal with these expenses on their own. Or, they might be working with an insurance company, which can oftentimes mean being on their own anyway. Lawsuit loans are for plaintiffs who are serious about staying afloat financially during their lawsuit.
Myth #2: Lawsuit loans take advantage of people that are strapped financially.
While it is true that lawsuit loan applicants seek the funding because may not have many financial options, lawsuit funding is an incredibly valuable tool for many reasons. To name a few, it provides plaintiffs with a way to pay for medical bills and other pressing expenses when they don’t have access to their settlement yet. It allows plaintiffs to fight for a fair settlement for longer rather than accepting a low offer just to have access to the settlement. It also gives plaintiffs peace of mind concerning their finances so that they can focus on their lawsuit. When plaintiffs have necessary expenses, using a lawsuit loan instead of a traditional personal loan can be a good option simply because lawsuit loans are designed to be convenient for plaintiffs.
Myth #3: The lawsuit loan company ends up taking most of the settlement through fees and interest.
Plaintiffs will be expected to pay fees for the service that the lawsuit loan company provides, but as long as they seek funding from a reputable company, most of the settlement will of course go to the plaintiff. This myth is accompanied by the idea that the fees are a ‘surprise’ and that plaintiffs don’t know how much they’re really paying until their settlement is already gone, but the truth is that there are reliable and unreliable businesses in every industry, and lawsuit funding is no different. The key here is knowledge—know who you’re doing business with and also know when and how much you will be expected to pay. Research the company online and make sure that the details concerning payments are very clear and up front. The plaintiff is entitled to know what will be expected from them and as long as those details are well understood (and documented) before anything is signed, there will be no surprises.
In fact, most plaintiffs don’t take an advance out of their entire settlement—they usually obtain an advance on a smaller portion of it. So, plaintiffs actually have a lot of control over their lawsuit funding, and as long as they shop smart, their lender can’t ‘take’ any money that wasn’t agreed upon beforehand.
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.