The market for lawsuit loans is constantly growing and so is the number of legal funding firms. Pre-settlement funding services are increasingly popular and common. Yet many personal injury victims hesitate to contact a legal funding company.
In some instances, a lawsuit cash advance offers a beacon of hope to a victim who needs money now while they hold out for a fair settlement. In other cases, borrowing money from a legal funding company can increase the plaintiff’s financial burden.
Prior to applying for a loan, carefully analyze all the advantages and disadvantages, and make sure they apply in your case. It is important to choose a trustworthy and transparent legal funding company that has your best interests at heart, and is not just out to exploit your situation for profit.
Lawsuit Loans in a Nutshell
Personal injury victims often face mounting medical bills and other financial obstacles. Serious injuries often mean a loss of income if the victim cannot perform their job duties. Victims are often unable to pay their mortgage and monthly expenses, and provide for their families. The litigation process can be stressful, dragging on for months or even years, with no guarantee of a settlement award.
Insurance companies take advantage of the pain and suffering of personal injury victims. They will pressure the plaintiff to accept a low offer, knowing a court case will cost them many times more. It may seem tempting to accept the money, to solve your financial problems right away, but the insurers’ compensation will not cover all your losses.
Pending lawsuit loans were invented to support struggling plaintiffs, providing instantaneous financial relief in the form of a cash advance against a potential future settlement.
Once the settlement is awarded, the negotiated sum is repaid to the funding company directly from the awarded amount, before the client ever sees a dime. The great news is that the plaintiff is not obligated to repay the loan if the case is lost in court.
The Pros of Personal Injury Loans
The following factors may inspire you to enlist the support of a legal funding company.
Fast Financial Aid
A cash advance is the easiest way to get the money you need now. The application process is very fast and simple. The plaintiff fills out a short form and provides their lawyer’s contact data. The legal funding company quickly reviews the case details, contacts the lawyer for details and documentation, and issues a cash advance within one or two days.
No Control Over Your Expenses
Legal funding lenders do not check how their clients spend the money they borrow. You can cover your medical bills and everyday expenses, pay tuition fees, or use the money for any other purpose. No one will ask you for a financial report or question how you budgeted the money.
Chance to Win the Best Settlement Possible
You need exceptional patience and endurance to survive the lengthy personal injury litigation process. Many personal injury victims cave into pressure and accept lowball offers from the defendant’s insurers, just to pay their bills.
A pre-settlement loan can relieve financial stress so you can withstand the pressure from insurance companies and hold out for the settlement you deserve.
The Cons of Personal Injury Loans
While the pros of legal funding may seem compelling, there are pitfalls you should be aware of, to avoid adding new problems to your already stressful situation.
High Surcharges
When you first receive pre-settlement funding, it may seem like a godsend. But if you fail to pay attention to the fine print, you may be left with next to nothing after your case settles.
Surcharges vary from company to company, but they are never low. Your initial cash advance could double or even triple during the litigation process, and that amount will come off the top of your settlement. It is little consolation that the lenders are prohibited from demanding more than your settlement amount, if the entire award goes toward legal fees and loan repayment.
Even if fees seem affordable in the beginning, interest is charged every month. A lengthy litigation can cause your debt to snowball. The yearly interest most firms collect amounts to 30-60% of the original loan amount. Plaintiffs whose cases take more than a year to resolve may end up with a shocking bill that eats up most of their settlement money.
Consider all available options prior to accepting a cash advance. It may make more sense to apply for disability payments, get a low-interest loan from your bank or borrow money from friends or family.
Your Application May Be Rejected
Legal funding firms decide to advance money based on the likelihood of a large court settlement. If they invest in the wrong cases, they stand to lose their money, since it is loaned on contingency of a successful lawsuit. To survive and grow their businesses, lending firms need to be extremely selective, working only with cases that have a high chance of paying off.
Plaintiffs often contact several firms before finding one that is interested in their case.
Lack of Government Control
Government bodies have little control over legal funding companies. There are no uniform federal and state laws, and no mechanisms in place for regulating fees and interest. Lack of standard regulations muddies the waters, since terms can vary widely from one firm to the next, making it difficult to find an honest lender that charges reasonable fees. The terminology in the legal funding industry is also confusing, with one company calling it a loan, while another calls it a cash advance.
There Are Few Reliable Firms
While there are many companies that issue pre-settlement loans, only a few are reputable and trustworthy. When looking for a legal funding company, take time to do some research.
Contacting the first company you come across is risky. Unless you were referred by a reliable source, you should read customer reviews, find out about their service terms and carefully read the fine print. Your lawyer can help you sort through the details.
Some companies use deceptive practices, burying their terms and conditions in legal terminology that the average person cannot decipher. At first glance, their offer may seem advantageous, but later you may be hit with hidden fees.
When choosing a legal funding company, look for one with a proven track record, good customer reviews and transparent terms, such as Cronus Capital Group.
Applying to Cronus
If after analyzing all the pros and cons, you feel a pre-settlement loan right for you, Cronus is here to lend you the cash you need to relieve your financial hardships.
It takes just a few simple steps to get your cash advance:
- Contact us by phone or by filling out our short online application form.
- Provide your lawyer’s contact information so our friendly staff can reach them for documentation and details about your case.
- Give us a little time to determine your eligibility and accurately estimate your loan amount.
- Get your money as soon as one or two days after you apply.
- Use the money to cover your everyday expenses, pay medical bills, or simply live your life while you wait for your case to settle.
- If your lawyer loses your case, we will not demand our money back.
Cronus Capital Group offers transparent and straightforward service terms. We have no hidden fees, and we treat our clients fairly and with respect. It is our goal to help you get past your injuries and move forward with your life.
Call us at 516-268-7299, or request a free consultation.
