LAWSUITS NEWS & LEGAL INFORMATION
Legal Funding Center — For Plaintiffs and AttorneysAs 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)
By 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.
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 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.
Legal Funding for Attorneys and Law Firms
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.