When to Seek Litigation Financing
Litigation finance comes with certain conditions that it is important to know of before going in for it. Do not be one of those who rushes in to use it without understanding what position it puts you in. You, therefore, need to know how to engage the litigation finance companies out there.
Litigation finance refers to the cash advance one gets based on the strength of their lawsuit, to help them fight the case to the end. You are expected to pay it back when your case is over, and you have gotten the settlement amount. This is not an outright loan. This money is not given to you personally, but directly to your case, where they see a high chance of you winning. They do not look at an individual’s credit history or bankruptcy status.
There shall be an interest on this type of loan. You will notice differences in how much each company charges. Such a cash advance is a risky venture, since the case, though strong, can go either way. The investment thus has all its outcomes pegged on the case. Cases that may have seemed destined for certain outcomes can quickly turn direction at the last minute. This is why they will charge high interests for their advances. They will do this so as to make up for any case that would have seen them incur a loss.
Apart from the interest rates, you may also face other charges on the cash advance. They are also dependent on the company you decide to use. They normally state these charges on the contract your lawyer signs, which will be brought out at the end of your case. They may charge you, among other items origination fees, application fees, a documentation fee, closing costs, and a premature payoff penalty. They share such items with what normal loans attract.
The litigation finance amount should not be looked at as a faster way of getting your settlement. This is only an amount that helps smooth out the operations of your defense. It is therefore important not to treat it as such. There shall always be differences in these two amounts. Their payment will be calculated as from when you borrowed it to when your case left you with the settlement amounts. There is a need to first explore lesser strenuous means before resorting to this one.
It pays to learn more about this service before going for it. When your situation allows for this kind of arrangement to win your case, you shall benefit greatly by understanding all that goes into this arrangement. You cannot afford to take it otherwise.