Types, Pros, Cons And Potential Pitfalls Of Settlement Loans And Lawsuit Loans

In the past, the terms settlement loans and lawsuit loans meant loans against a court ordered settlement you have won in a law suit. Such things were paid out to you over a period of time usually in monthly payments, but you had the right to convey your interest in them by selling them for a more guaranteed lump sum.

To borrow against them you had to prove monthly income. Many of these cases involved injuries that precluded the plaintiff from being able to resume employment. In such instances, prior to the evolution of litigation funding, the only other option you had was to sell it to some investor who gave you less than it was worth, but you got a chunk of money right then, instead of having to wait.

Although this may not be preferable, but the fact is that many of those against whom judgments are ordered would be classified as “judgment-proof.” If you need the money for major health problems, you may have to liquidate assets to pay doctors’ and hospitals’ bills. Lawsuit Loans and settlement loans often keep plaintiffs from having to liquidate their assets merely to satisfy outstanding indebtedness.

The more common use of settlement funding today is a lawsuit loan that one may obtain for those people who otherwise would have much more than they make and would get behind on their monthly payments. A settlement loan is one way to avoid financial distress in litigation.

If you decide to restructure, have your IRS Tax Return papers handy. Lenders will want to have proof of your ability to make payments. Sometimes your creditor will agree to waive the accrued interest while the account was late, and extend the term of the loan so you have smaller payments. (Once again, there is no credit-check required for those seeking lawsuit loans and settlement loans.)

Most often creditors will agree to reduce the amount of the obligation owing by the financially-stressed individual simply to get rid of the debt. However, if you have been unable to make the smaller monthly payments, how are you going to come up with a huge chunk of money to satisfy the amount to which the obligation is reduced? This is where litigation funding can assist in easing the management of all of your outstanding debts!

One of the best things you can do is avoid using credit cards to over-spend. Instead, put the money you would have spent on unessential things into, for example: (a) an interest-bearing account: (b) pay more into your IRA or other retirement account to offset the impending rise in cost of living between now and the time you can retire; and (c) invest in a worthwhile project. Contrary to others’ recommendations, plaintiffs are not advised to obtain lawsuit loans and/or settlement loans to go on spending-sprees, etc. As in all financial considerations, proceed in a prudent fashion.

Do you think a lawsuit settlement loan is right for you? Would you like to learn more about lawsuit loans? Please visit us today and you may apply online for lawsuit funding and learn more about the benefits of settlement loans.