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Legal Funding Center — For Plaintiffs and Attorneys

As anyone who has been involved in a personal injury lawsuit knows, once a lawsuit is filed, it can be a long time before a settlement is reached and any award is paid. As a result, some people turn to lawsuit funding. Plaintiffs—victims who’ve been injured—usually have ongoing expenses to cover while waiting for their lawsuits to work their way through the legal process—including medical care and cost-of-living expenses. Legal funding companies offer pre-settlement funding and post-settlement funding to help plaintiffs survive financially while they wait for their awards.

Additionally, Attorneys or law firms may seek law firm financing to provide cash flow while a case is in litigation. Legal funding can be used to hire expert witnesses, pay for case and trial costs, litigation support, general operating expenses, tax distributions, marketing and business development. In addition, financing is available for fee advances on settled cases, verdicts and cases on appeal.

Legal Funding for Plaintiffs (Victims)

Pre-Settlement Funding for Plaintiffs
Pre-settlement funding is money given by a firm to a plaintiff in anticipation that the plaintiff will receive a settlement in her lawsuit. A lawsuit can take years to settle, during which time a plaintiff may have financial needs that must be taken care of immediately, for things such as medical care or to cover living expenses while the plaintiff is unable to work.

Legal FundingBy obtaining pre-settlement legal funding, the plaintiff has immediate access to money and is not required to pay the firm until a settlement is reached in her lawsuit. Pre-settlement funding companies offer up to $500,000 for plaintiffs in lawsuits. Pre-settlement funding is offered as non-recourse funding, which means that plaintiffs only pay the money back if they win their lawsuit or obtain a settlement. Furthermore, they only pay back up to their portion of the settlement if their settlement is less than anticipated.

Lawsuits eligible for such funding typically involve personal injury or wrongful death. Companies that offer pre-settlement funding often charge fixed fees, monthly fees or a combination of both.

Pre-settlement funding is not currently legal in all states. In some situations, pre-settlement legal funding may eat up all proceeds from a settlement. Some companies charge high fees for funding and some put limitations on how the money can be spent. Post-Settlement Funding for Plaintiffs
Post-settlement funding occurs after an award has been made or a settlement reached in a lawsuit but before the award or settlement is paid out. Some plaintiffs find that they require post-settlement legal funding because even when an award or settlement is given, it can still take time for the payment to be made. In the case of an award, the defendant could appeal the court's ruling, resulting in a long time before the award is paid out.

Meanwhile, the plaintiff may need access to money during that time to pay for ongoing medical care or cost of living expenses.

Post-settlement lawsuit funding is legal in all states. It is considered non-recourse funding, meaning that if the plaintiff does not receive the award money—for example if the defense is successful in appealing the award—then the money is not paid back to the funding company. Structured Settlement Funding for Plaintiffs
A structured settlement is a financial arrangement in which a claimant in a personal injury or wrongful death lawsuit accepts periodic payments to resolve a claim rather than a lump sum settlement. Often, structured settlements involve the use of annuities, which guarantee that future payments will occur. Structured settlements can involve any schedule that the parties agree to, including monthly or yearly payments or even payments every few years.

Structured settlements can be beneficial to the claimant because they can reduce his tax obligations. Furthermore, they provide long-term finances for people who may require future care but are worried about managing a lump sum payment. Finally, structured settlements are guaranteed and their rate of return is not affected by changes in the market. However, for people who want to invest or need the money right away—for example, they want to purchase a new home—structured settlements may leave them without the finances they need.

Selling Structured Settlements There are companies willing to purchase structured settlements from plaintiffs. They pay a lump sum amount to purchase the structured settlement from the plaintiff, which provides the plaintiff with accessible money.

Companies who buy structured settlements make their money by purchasing the structured settlement at a discounted rate—less than what the plaintiff would have received if she kept the structured settlement for the full term. While selling a structured settlement may be a good option for a plaintiff who needs readily available cash, consumers should take caution. Because companies that buy structured settlements do so to make a profit, consumers need to completely understand the terms involved in selling a structured settlement to ensure they are making the best financial decision for their situation.

However, some states have laws that restrict the sale of structured settlements. Furthermore, tax-free structured settlements face federal restrictions on their sale. Finally, not all insurance companies will assign or transfer annuities to a third party. Medical Lien Funding for Plaintiffs
A medical lien ensures patients receive adequate medical care while ensuring that the medical care provider receives full payment for all services provided. It is used in situations where the injured person does not have insurance coverage for the medical services necessary to treat his personal injury. A medical lien funder evaluates the personal injury case and enters into an agreement with the patient and attorney to provide funding for medical services. Once the lawsuit is concluded, the patient repays the funder with money from his settlement.

Legal Funding for Attorneys and Law Firms

Law Firm Financing for Attorneys
Law firm financing, attorney loans, and law firm working capital lines of credit are terms used interchangeably to describe financing (working capital loans) provided to trial and personal injury law firms and attorneys who work on contingency basis. Attorney funding provides attorneys the means to properly build a case against well-funded defense firms representing large, deep pocketed corporations and insurance companies.

  Law Firm Financing is available for a wide array of uses: to hire expert witnesses, pay for case and trial costs, litigation support, general operating expenses, tax distributions, marketing and business development. In addition, financing is available for fee advances on settled cases, verdicts and cases on appeal. Lawsuit Funding for Attorneys
Lawsuit funding offers consistent cash flow for attorneys, based on their caseload. These loans are designed to provide financial stability for lawyers during the times when cases are being tried and before awards or settlements are paid out. The loan or line of credit is granted based on the attorney's contingent fee portfolio and is non-recourse, so if the attorney loses the case, the financer does not recover the money given. Lawsuit funding not only helps cover office expenses, it also provides funding for costs associated with filing lawsuits, such as paying for expert witnesses, court filing fees and other costs.


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