The lawsuit loan was created for the purpose of providing financial relief to plaintiffs who are in need of money but could not apply for traditional loan products. This lawsuit loan can be considered as emergency funding because it can help the client pay their bills or put food on their table every day. It can also be used as a leverage to help the lawyer negotiate for a much higher settlement.
Lawsuit settlement funding is the best solution for most people who are victims of vehicle accidents or medical malpractice. However, not every plaintiff can be considered as a good candidate for this type of lawsuit loan. Here are some of the major reasons why other applicants are not qualified to receive these settlement loans.
You are Not Represented by an Attorney
When lawsuit funding companies tell you that you are qualified for a loan, it means they are investing on your lawsuit. You need an attorney because they provide case documentations that help the funding company determine if your case is strong and has a high chance of winning. The attorney is also in charge of repaying the legal financial solutions company when the settlement is established.
Your Attorney Doesn’t Provide Case Documentation
Even if you have an attorney, there is still a possibility that you will be denied the loan. If your attorney fails to show any case documentation to the funding company, then the underwriters cannot determine if the case is qualified for a lawsuit loan. Another reason is if your attorney is not working on a contingency basis.
You Don’t Have a Strong Case
When the plaintiff loses the case, the repayment for the lawsuit cash advance loans are completely waived. The company is taking all the risk when it accepts the case and approving the pre settlement funding. In order to limit their risk, most lawsuit funding companies only accept cases that are strong and have a good chance of getting a good settlement.
When the Company Sees That You Have No Equity in the Case
The equity is the value of the lawsuit after the fees, expenses and liens have been subtracted from the settlement you are expected to win. When the funding company sees that it will only provide small or zero equity, they will know that their loan will not be repaid. Thus, the company can deny you of lawsuitsettlement loans.
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About the author
Michael Smith is the Customer Experience Director at 911 Lawsuit Loans LLC and is responsible for client relations throughout the funding.