What is the difference between a lawsuit loan, a lawsuit cash advance, litigation financing and pre-settlement funding?
These terms all mean essentially the same thing. However, since none of these transactions are loans, the term “lawsuit loans” – even though you will hear it and see it used – is not correct because a lawsuit advance is NOT a loan.
What is the difference a conventional loan and an advance such as a lawsuit cash advance?
A loan has to be repaid regardless of your ability to repay it. For example, if you get a loan to buy a car, but you lose your job or you cannot work, so you cannot make the payments, you are still obliged to pay back the loan. And the issuer of the loan will take whatever actions they can to collect their money, including repossessing your car. A lawsuit cash advance (or litigation financing or pre-settlement funding) are transactions in which you are only obliged to repay the advance if and when you either win your case or reach an out-of-court settlement. Here are the major differences between a conventional loan and a non-recourse advance such as a lawsuit cash advance.
Approval of your loan application is based on your credit history
Approval of your loan application is based on how much you earn
Loans require that you make a monthly payment
A loan must be repaid, regardless of your ability to repay it
When you apply for a lawsuit cash advance, we do NOT request a credit history or run a credit report
When you apply for a lawsuit cash advance, we do NOT ask for verification of employment
A lawsuit cash advance has NO monthly payments. It is paid back in one lump sum from the proceeds of your settlement.
A lawsuit cash advance is ONLY repaid if and when you win your case. Should you lose, you keep the money and you owe LawMax nothing!
What are the benefits of a lawsuit cash advance over a traditional loan?
First of all, if you do not qualify for a loan, you could still qualify for a lawsuit advance because approval of a lawsuit advance is based on entirely different criteria. Plaintiffs in lawsuits often find themselves out of work, so they cannot provide the proof of employment needed to qualify for a loan. Some plaintiffs fall behind on their bills, so by the time they apply for a loan their credit rating has already been damaged. There is some truth to the old saying that banks only lend money to people who do not need it. However, to be as fair as we can, there are advantages to a conventional loan. Here is a side-by-side comparison.
A bank loan can be relatively inexpensive. If you quality, you can get a low-interest loan from a bank or credit union.
Need to show proof of employment.
Bank will run a credit report on you.
A loan will require make monthly payments.
You will be required to repay the loan, even if you lose your case!
A lawsuit cash advance will be more expensive than a bank loan, but if you do not qualify for a bank loan, and you need the money, you really have no alternative.
A lawsuit cash advance is based on the quality of your legal claim, so we do not request proof of employment.
Because lawsuit cash advances are based on the quality of your claim, we never run credit reports on any applicants.
A lawsuit cash advance is repaid in one lump sum from the proceeds of your case.
Should you lose, you keep the money and you owe LawMax nothing!
How does the process of receiving a lawsuit cash advance work?
Here is the process.
You apply on-line or by calling us toll-free at 877-6-LAWMAX (877-652-9629), and you provide us with some basic information about your case.
A LawMax underwriter reviews your application, then contacts your attorney for supporting documentation.
Your attorney can mail, fax or e-mail us the documentation we need. Once our underwriter has reviewed it, he will discuss the case briefly with your attorney.
Once your advance is approved, we send a Claim Investment Agreement to your attorney to review on your behalf.
You sign the agreement, and your attorney acknowledges the lien we now have against the proceeds of your pending lawsuit.
As soon as we receive your completed paperwork, we immediately issue a check. If you wish, we will overnight your check to you.
While your case works its way through the legal system, we are NOT involved. We let your attorney handle the case.
When you either win your case at trial or you reach an out-of-court settlement, your attorney contacts us and issues us a check from the law firm’s trust account, paying off the advance plus the accumulated risk premium on that advance, when he also pays any other lien holders.
Should you go to trial and lose, or should you and your attorney decide to abandon your case, you keep the money you received from LawMax and you owe us nothing.
How do I speed up the application process?
The only hold-up in the process (see the previous question and answer) is in getting supporting documentation from your attorney. You are certainly not required to do this, but if you want to get pro-active and speed up the process, you can ask us what supporting documentation we need, visit your attorney and get copies of those documents, then send the documentation to us.
What is the purpose behind a lawsuit loan?
The US civil law system has it advantages and disadvantages. If you are injured and are seeking compensation for your loss, a personal injury attorney will take your case on a contingency basis. That is, the attorney gets paid out of the proceeds of the settlement, and only if he or she secures a settlement for you. That’s the good news. The downside is that in most states it takes 10 to 15 months for civil cases to come to trial. That means you can wait months – even a year or longer – before you actually see any cash from your lawsuit!
A lawsuit loan – or, more correctly, a lawsuit advance – bridges the gap. If you’ve been out of work and have fallen behind on the mortgage or rent, car payments and other bills, a lawsuit advance provides cash to pay those bills. If you have medical bills or rehab services that need to be paid, or you need to pay for drugs or post-accident treatments, a lawsuit cash advance provides cash when it is needed most. You may qualify for unemployment or worker’s compensation, but those payments are usually a fraction of what you normally earn, so you are still in a hole until you receive cash from your lawsuit.
While you are free to use the cash from your lawsuit advance any way you wish, the money should not be used frivolously. It should be used to pay for living expenses while you await the outcome of your claim.
Do I have to have an attorney representing me?
Yes. We only consider cases in which the plaintiff has retained an attorney. If you believe you have a legitimate claim, but do not have an attorney, we provide free referrals to personal injury attorneys our Attorney Referral Service.
What types of cases do you fund?
LawMax funds the broadest selection of legal claims of any lawsuit funding source. The cases we fund include – but are definitely NOT limited to – these three groups.
Personal Injury
Auto and truck accidents
Plane, train, bus, mass transit and cruise ship accidents
Premises (slip, trip and fall) accidents
Wrongful death claims
Workplace, industrial, commercial and construction accidents
Wrongful termination claims
Medical and dental malpractice
Products liability claims
Dog bites
Burns
Nursing home abuse
Legal and professional malpractice
Commercial Lawsuits
Tortious interference
Trademark and patent infringement
Fraud claims
Industrial products liability
Construction claims
Anti-competitive and anti-trust lawsuits
IP (intellectual property) disputes
Qui Tam
Other Claims
Inheritance cases
Divorce claims
Appellate cases
Funding for attorneys and law firm
I have more questions?
Call LawMax at 877-6-LAWMAX (877-652-9629) or submit your question below and we will respond by e-mail.
LawMax offers:
* Cash for personal injury plaintiffs
* Working capital for commercial clients
* Funding of inheritance and divorce claims
* Working capital for attorneys/law firms
