Lawsuit Financing

Lawsuits, litigation fees and court costs can be incredibly expensive. Conventional loans and lines of credit are available most often to lawyers and their legal firms. Plaintiffs who require assistance in funding their lawsuit cannot borrow from their lawyer because of a resulting conflict of interest. Instead, they may wish to take out a lawsuit loan. This takes the form of an advance fee, form of venture capitol or investment from a lawsuit-funding company that will be repaid at high cost, following the court case. Your lawyer is a good resource for advice in locating the best lawsuit funding company. In any case, be sure to ask the company about the nature of the financing. Most litigation lenders offer a non-recourse loan, meaning that you repay the loan from your court victory or settlement. Ask the lender about their terms for repayment. They may use a flat fee, meaning you strike an agreement from the outset on a set sum for repayment, or a recurring fee, in which a monthly percentage of repayment is agreed upon. Ask the companies if they offer options. Your lawyer can discuss and weigh these with you. The companies’ responses may determine which you borrow from. Researching multiple companies is wise because some will beat a competitor’s offer. This deal can save you thousands of dollars.

Those who do not wish to do business with a lawsuit lending company may choose to borrow money from family and friends or simply to take out credit cards for the specific purpose of lawsuit financing.