Medical malpractice lawsuits in the United States are filed each and every day. Because medical malpractice cases are complex these types of lawsuits can take months and even years before settlements are obtained. Due to the amount of time, some people are forced into smaller settlements. When a person has limited financial resources and can’t pay for their bills because they are out of work, they may become forced into an unfair settlement.
Over the last 10 years, lawsuit funding has become popular among plaintiffs in pending lawsuits resulting from malpractice. A lawsuit loan is a non recourse advance that provides a claimant financial relief while waiting for their cash award. Because this form of financing is non recourse, a person only pays back the advance if they win their case. The reason why this financial tool has become popular among thousands of people throughout the United States is because it provides them money prior to their settlement so they can pay their bills without having to settle for less.
It is important that when you apply for an advance against your case, you understand the process and how rates are calculated. The process begins with an application that requires a release. This release gives a legal funding company the right to contact your attorney. The attorney is contacted in order to obtain legal documentation on the case.
This documentation is used during the underwriting process. The underwriting process is used to assess liability and the value of the case. If the underwriter believes the case is a good case, they may approve the applicant.
Because the loan is non recourse only those cases that have a strong chance of winning will be approved. The rate is generally determined based upon the strength of the case. The stronger the case the better the rate. The best rates for any advance are those cases that have already settled. This means a case has reached a settlement or a case was won during a trial.
It is important to understand that pre settlement funding and post settlement funding can be expensive. This type of financing should only be used as a last resort.