If you have a case pending in court where you’re claiming money from a defendant, you might be in a tight financial spot. This is especially true in personal injury cases where you have to pay hospital fees because you’re not insured. You may have been hit by a truck or you may have gotten into a very nasty slip-and-fall injury, and you may be facing steep hospital fees. In such a situation, many people face dire financial options. A lot of people have to declare bankruptcy. A lot of people have to borrow money from friends and relatives.
Well, if you’ve run out of financial options, lawsuit loans may be available to you. Here are some factors to consider. Make sure you pay careful attention to these factors. Otherwise, you might end up feeling sorry for yourself after you’ve made a less than fully informed decision.
If you’re looking at that thick pile of hospital bills in front of you or bills related to your accident or legal claims, you have to understand that there is a time issue here. Time is not on your side. Why? Your case might be calling through the court system for resolution while your bills are piling up very quickly. The worst part of this is that your bills often have penalties attached to them. You have to remember, legal cases take time to resolve and the longer your case works its way through the court system, the thicker your pile of bills become.
They become thicker because of additional fees and penalties. You don’t want to be in a situation where you end up winning your case, but then all those dollars end up going to pay your accumulated financial obligations.
Always remember that lawsuits can end in one of three ways. They can be dismissed or you lose your case, they can end in a positive judgment for you, or the defendant may settle with you. With two of these situations, you end up with money. In the first situation, you lose out.
Assuming that there’s a high likelihood that your case will end in a favorable judgment or in a decent settlement, lawsuit loans may make sense. If anything, they provide you with the financial means to make ends meet. They give you enough money to make that pile of bills go away.
You have to remember that lawsuit loans are going to be paid by a future judgment or settlement. Understand that this is how they’re structured, but they are still loans. In other words, you still have to pay them off. A lot of people have this magical thinking about lawsuit loans that somehow or someway that they are free money. No, they’re not.
The moment you get a judgment or settlement, you then have to start paying your lawsuit loans. Your lawsuit loans are not going to go away. Always remember that they are loans. They’re not grants, scholarships, or free money.
It’s really important to understand that lawsuit loans still have to be paid even if you lose your case. Talk about a double whammy. That’s the worst thing that could happen. You already got hurt, and now you’re going to be hurt financially from both ends. Not only do you have to pay your lawsuit loans, but you also have to pay your accumulated bills. Do you see how messed up this situation can be? This is why it’s really important to consider lawsuit loans only if you have a high chance of winning your case.
Now, how do you figure this out? How do you know you have a high chance of prevailing? Very simple, ask your lawyer. Based on ethical rules, your lawyer can lay out the scenario in front of you, but he cannot tell you that you are going to win. Pay attention to what your lawyer says. Put two and two together, so you can come up with an accurate assessment of your chances of winning.
Another point of consideration is the total amount you’re loaning. If the total obligation will be manageable in light of how much money you see yourself collecting, from either a judgment or settlement, then it may make sense to take out a lawsuit loan. However, if you’re just rolling the dice and you’re hoping that you will get maximum judgment or maximum settlement, and then you’re taking out a massive lawsuit loan, you might be setting yourself up for a financial disaster.
You have to look at things realistically. Pay attention to the amount of probable settlement or judgment, and then reduce that amount further and that should be your lawsuit loan ceiling.
As mentioned earlier, you should not ask your attorney point blank if you’re going to win. They can’t ethically guarantee legal victory or settlement. By the same token, they can tell you how close your case is to a resolution. They have access to court schedules and arbitration schedules. They have this information and they are aware of it. So even though this is not a slam dunk, they can at least give you an approximation of how close your case is to a resolution.
You have to factor this is in your decision on whether to take out a lawsuit loan or not. If your case is still a long ways away, if you take out a lawsuit loan now, you might end up paying a lot of interest. However, if your lawsuit is close to being resolved, in a fairly short period of time, then it may make sense to take out this type of financial obligation.