In recent years, more and more people have heard about lawsuit funding in California.
Despite the industry’s growing presence and popularity, many people still don’t really know what a lawsuit loan is or how it can help them.
As a company that specializes in lawsuit loans in California, Injury Wallet put together this piece to quickly cover the basic principles of lawsuit and settlement loans.
Without further adieu, here are the answers to some of the most common questions we get about settlement loans in California.
What Is a Lawsuit Loan?
A lawsuit loan is a sort of financial bridge available to plaintiffs in most civil cases.
If you are a plaintiff in a civil case, you are likely seeking compensation for damages someone else caused you. Oftentimes, those damages are economic damages like medical bills and lost wages.
Those extra costs, on top of your normal bills and cost of living, can put you in a financial bind. If you’re in a financial bind, it impedes your ability to negotiate effectively. In fact, it may make you negotiate desperately.
If you go into negotiations desperate to settle as soon as possible, you are likely to accept a settlement offer that doesn’t fully account for all of your current and future damages.
That’s never a good thing because once you accept the settlement you cannot go back for more later. And if your expenses continue for years, you may find yourself in a bad financial mess after the low settlement amount you accepted runs out.
By taking out a lawsuit loan you enable yourself to pay your current bills, eliminate desperation, and put yourself in a much more powerful negotiating position.
You can use settlement loans in California for whatever you need. If you need to pay off high-interest debt like credit cards or medical bills, you can do that.
If you need to pay rent or put food on the table, you can also do that. The use to which you put your California lawsuit loan is entirely up to you.
How Does a Lawsuit Loan Work?
A lawsuit loan works like any other loan. The only difference is the collateral.
Most loans are recourse loans. In a recourse loan, your collateral is the entirety of your assets. Thus, if you default on a recourse loan, your lender can seek repayment through any assets that you own.
This is not true for non-recourse loans like lawsuit loans in California. In non-recourse loans, the loan agreement lays out specific items for collateral.
In the event of a default, your lender can only seek repayment through those specific items or assets. In a lawsuit loan, your collateral is your future settlement.
This has massive practical implications that take much of the risk out of lawsuit loans. If you lose your case or fail to settle out of court, the collateral you put up is nonexistent.
As a result, your lender has no way to seek repayment. That’s not a loophole, either. It is a feature of all forms of pre-settlement funding.
Do I Qualify for a Lawsuit Loan?
Generally, there are just two requirements necessary to qualify for pre-settlement funding in California. They are as follows:
- A lawsuit must exist, already filed, that lists you as the plaintiff; and
- You must have an attorney representing you in that lawsuit that the lender can get in touch with.
You read that right—it’s that simple to qualify for a lawsuit loan. There is no credit check, employment verification, or even income verification required for such a loan.
The reason that lenders need to speak with your attorney is to ensure that a verifiable lawsuit is in motion. Without a lawsuit, the collateral for your loan simply would not exist.
The information about your case that your lawyer provides to prospective lenders will affect your loan. Your lawyer will typically provide an estimated settlement value as well as a reasonable estimate on your case’s chances of success.
Those two factors are what most pre-settlement lenders look at in order to determine both the amount of money they will loan you and the interest rate they will apply to the loan.
So to summarize, all you need to qualify for a lawsuit loan is an attorney and a lawsuit.
How Can Injury Wallet Help Me?
While Injury Wallet is not a loan provider ourselves, we can help you save money and take the guesswork out of shopping for your pre-settlement funding in California.
How do we do it? We do the shopping for you. Shopping for any big purchase is often a painstaking process. That goes double for any type of loan.
First, you have to fill out application after application.
Then, you have to parse through all the legal jargon in each and every contract to find the best interest rate. It’s a painstaking process.
And without prior experience in loan contracts, it’s easy to miss hidden fees and absurd interest rates. When you use our service, you don’t have to worry about any of that.
With Injury Wallet, you fill out just one application and submit it to us. Then, we use our connections in the industry to shop your application to the top providers of settlement loans in California.
When they give us an answer on your application, we look through it. Once we look through all of the responses, we come back to you with the best possible interest rate we can find.
We always account for hidden fees too, so you won’t have to worry about any surprises.
Get Started With Injury Wallet Today!
Why do the shopping yourself? It’s just going to take time and add another headache on top of everything else you are dealing with.
Furthermore, why take the risk of missing hidden fees and interest rates in complex loan agreements?
Instead, let Injury Wallet take care of the shopping for you. With Injury Wallet on your side, all you have to do is file one simple application and let us take care of the rest.
At the end of the day, you want the most out of your settlement.
So let us help you get the most out of your settlement. Get started with Injury Wallet today!