What Is a Lawsuit Loan?

A lawsuit loan is, quite simply, a way of replacing lost income and paying living expenses while you wait for your lawsuit to be resolved. In many cases, the events that lead up to a lawsuit can affect a person’s ability to pay his or her living expenses. A personal injury, for example, may leave a plaintiff unable to work. The injury may have caused time away from work, resulting in lost income and possibly creating unpaid bills. At the same time, a personal injury that leads to a lawsuit often leads to additional expenses. Many injuries require expensive medical treatment and time away from work to receive those treatments. Additional expenses and lost income can easily lead to financial hardship, which is why a lawsuit advance is an option to consider.

Most plaintiffs who have suffered an injury do get some compensation for their suffering and the expenses incurred because of the injury. Unfortunately, getting a financial recovery takes time. A case may continue for months or even years before a plaintiff sees any proceeds from his or her settlement. In cases where the defendant is a large corporation or insurance provider, it may delay the case, hoping that the plaintiff will drop the claim or accept a low-ball offer. In these cases, a lawsuit loan can help you negotiate from a position of strength. With cash from a lawsuit advance taking care of your living expenses, you can wait for a fairer, larger settlement.

Many plaintiffs rely on loans, credit card cash advances, or personal savings to cover living expenses while they pursue their lawsuits. While traditional types of financing like these can be less expensive than a lawsuit advance, they also create their own problems. Traditional loans require employment verification and credit checks. If your credit has been damaged or you cannot show employment, it is not likely you will be able to borrow the money you need to pay your expenses. In addition, if you do qualify for a traditional loan, it needs to be repaid–usually on a monthly payment and starting immediately–regardless of your income or ability to repay it. Even if you lose your case and recover nothing, you will need to repay your loan in full. A LawMax advance, on the other hand, is based entirely on your case. You only have to repay in the event that you win your case or settle out of court. If you lose your case, you can keep the advance with no further obligation to LawMax.

A lawsuit can create real financial distress for a plaintiff. There are cases where a lawsuit advance is the difference between homelessness and continuing to live in relative comfort. Even though you are involved in a lawsuit, you must continue to make repayments on all your traditional financing–including your mortgage, car loan and other obligations. Traditional lenders do not consider financial hardships, but require monthly payments no matter what may be happening to your ability to repay. If you start to miss payments because of lost income or increased medical expenses, you may face harassing collection calls. Your credit score may drop. Worse yet, your mortgage company may foreclose on your home, or you could be evicted from the home you rent. Your car may be repossessed.

A lawsuit loan can help you avoid these problems by helping you pay your living expenses. Best of all, because a lawsuit loan is a non-recourse type of litigation funding, you will not have to make monthly payments. Unlike a traditional loan, a LawMax advance only needs to be repaid if and when you receive a settlement from your lawsuit.