The ins and outs of Legal Funding
You can find out more by calling a Pegasus Legal Funding representative and we’ll answer all your questions and help you get the money you need.
Lawsuit settlement loans function as follows:
Who is eligible for a lawsuit cash advance?
- The plaintiff, you the inured party are involved in a personal injury accident. Typically a motor vehicle, premise, slip/fall, or work-related legal claim. You are awaiting a settlement to make you whole, but you find yourself strapped for cash because being out of work following your injury.
Why would you need a lawsuit funding?
- The legal system works slowly and insurance companies take considerable amount of time to research your accident before even considering offering you compensation for your accident that was their customers fault. Since you are in a financial crunch with possibly new medical related cost you are incurring, you go online and look for financial relief. You call a pre-settlement loan company and with the help of law firm evaluates how likely it is that the case will settle in your favor and estimate what your settlement will be at the outcome of your legal action. Cases with minimal injuries, poor liability (where you caused the accident), or where you have excessive medical expenses might not be considered.
How a legal financing works
- If and when the lawsuit loan company offers you a cash advance, you and your attorney are sent an agreement outlining the terms of the advance. With Pegasus, we include a buyer’s remorse clause , which you are provided a time period to change your mind and not be obligated to the terms of the agreement as long as you return the funds sent to you back to Pegasus. We also include a projected repayment schedule so that you can see how much the advance will cost you at a time when you receive your settlement. This is projected because no one really knows when you case will be completed, not even your lawyer. Then once you and your attorney execute the agreement (when the contract is signed properly by both parties), your cash is sent.
What happens at the conclusion of your case?
- If you lose your case, then you are not legally obligated repay any part of the settlement loan. If the final settlement is insufficient to cover the loan and the interest your lawyer will negotiate a final repayment. This is because you are not really taking out a lawsuit loan, but a non-recourse cash advance. Remember we are investing a portion of your expected settlement.
- But when you do win your lawsuit, the pre-settlement loan company gets paid from the proceeds.
So in conclusion, lawsuit loans can very expensive for the simple fact that unlike a traditional bank loan, which you start repaying back immediately on a monthly schedule. Paying down the interest and finally down to the principal, a settlement loan is only necessary to be repaid at the successful conclusion of your case. So consider taking this advance very carefully and we recommend that you should only consider using Pegasus only after you exhaust all your other alternatives.
.:About the author:.
James Sheridan is the Contracts Manager at Pegasus Legal Funding LLC and is responsible for the final stage of the funding approval process. James focus and priority is delivering to PLF’s clients the funds they need as quickly as possible