According to the Centers for Disease Control and Prevention (CDC), millions of Americans seek medical treatment for accidental injuries each year.
When the accident is their own fault, victims often rely on their insurance to cover those costs. When someone else causes an accident with injuries, there are two possible outcomes. One is that the responsible party’s insurance company pays for the accident victim’s medical treatment and so on. The other is that the injured party sues them to obtain compensation for financial, physical and emotional losses. This type of lawsuit is called a personal injury case. Examples include motor vehicle accident cases, slip and fall cases, medical malpractice and product liability cases.
Filing a lawsuit now can result in a payout down the line, but getting the process started can be difficult. Pre-settlement funding, which may include what some refer to as personal injury lawsuit loans, can help cover the cost of medical care, and other routine expenses until you get your settlement money. They are relatively easy to qualify for and can dramatically reduce your stress levels when you’re dealing with a serious injury. Here’s what you need to know.
Getting Pre-Settlement Funding is Fairly Simple
At Oasis, we spent years helping plaintiffs with pending personal injury claims get the financial relief they need. So, we know you have questions and concerns, and we fully understand. We know you are worried about each and every expense. We get it if you are concerned about your employment and insurance claims and what will happen if you lose your case in court.
With so much on your plate, a big part of our job is making your life easier. Therefore, we begin by making it fairly simple to qualify for pre-settlement funding, whether it takes the form of a pre-settlement purchase agreement or a lawsuit loan.
The process varies among funding companies, but you can usually fill out an application online. In addition to basic information about you and your case, you have to provide contact information for your personal injury lawyer. After the provider gets your application, it will request more detailed information from your lawyer.
The provider needs this information to evaluate the merits of the case, the chances for success and how much it is worth. If there is a good chance you will get a favorable settlement or judgment, the funding company will usually approve your application and provide cash by check or wire transfer.
The good news for consumers is that there is no need to go to the bank, and credit score is not a factor. This means that you, as the borrower, don’t have to worry about poor credit affecting your application.
With few of the hassles associated with a traditional loan or credit card application, a qualified applicant typically gets his or her legal funding within a couple of days.
You can Pay Them Back After You Get your Settlement
Once you have your pre-settlement money, you can use it to pay for almost whatever you wish. Most plaintiffs in ongoing personal injury litigation use these funds to cover urgent expenses like surgery and medical bills. Plaintiffs who are unable to work because of their injuries often use this cash to cover monthly costs such as the rent, mortgage, car payment, groceries, credit card bills, utilities and so on. The only thing you cannot use these funds to cover are your legal costs and expenses.
The terms for repayment depend on two key factors. One is the type of settlement funding or lawsuit loan you received. The other is the language in your funding agreement. This is the agreement that you must sign prior to receiving any money from a funding company. It will specify the terms regarding repayment, which may include monthly installments if provided as a loan, or the most common way, in which funding is paid back upon your settlement.
Disadvantages of Pre-Settlement Funding
Critics say the lawsuit lending industry targets and takes advantage of vulnerable people. They claim it does so by charging exorbitant interest and fees. unscrupulous lenders have engaged in these practices in the past, the industry is changing now many funding companies are licensed in certain states as a consumer legal funding company.
As with any agreement, there are certain things you should be aware of if you are considering entering into a funding agreement. The most important of these is that you will be liable not only for repaying the amount funded, but also any fees or charges attached to it. Therefore, it is crucial that you compare providers to see who has the most reasonable fees. But that is not all. Because the resolution of a personal injury lawsuit can take a long time, it is also imperative that you understand how charges are calculated. If you are unsure, ask.
What if my Settlement or Judgment Doesn’t Cover the Legal Funding?
Lawsuit fundings, legal fundings, pre-settlement fundings and lawsuit loans are often advertised as “nonrecourse” transactions. The premise here is that you do not owe anything if you lose your case. But what if your settlement or judgment isn’t enough to cover the amount you received from the funding company and the associated charges and charges?
The answer depends on the details in the contract you entered into with the provider. In some circumstances, they will simply take the amount remaining after the deduction of your attorney fees, medical lien reimbursement and any other applicable deductions. In some circumstances we will work with you to find another solution. We will also work with you to find a solution if your settlement or judgment is less than anticipated and there is nothing left to repay.
Who Should Apply for a Legal Funding?
Industry insiders say pre-settlement funding is a viable solution for many people. They also say they are providing a necessary service. But is it right for everyone? Not necessarily. Experts urge plaintiffs in pending personal injury lawsuits to explore other options before applying for a lawsuit loan.
First, consider approaching a traditional lender, such as a bank or credit union. Depending on your financial standing, a conventional lender may be able to offer a loan or line of credit with reasonable interest rates that you can pay back over time. You may also want to consider a home equity loan if you have your own house and it is worth more than you owe on your mortgage.
If you are concerned that you do not qualify for the type of financing we just detailed, think about asking family or friends if you can borrow some money to help you get by. Barring that, talk to your agent to see if your own insurance can cover some of your costs.
Depending on your situation, you may find one or more of these options is more affordable than a pre-settlement funding in the long run. If none of them works for you, a pre-settlement funding may be the perfect solution.
Legal Fundings are available for many different types of Personal Injury Suits
In the legal profession, “personal injury” is a broad term encompassing litigation stemming from:
- car crashes
- slip and fall accidents
- workplace accidents
- medical malpractice
- animal bites
- defective products
- and more
One of the most appealing aspects of a legal funding is that a qualified applicant can get one no matter what type of personal injury suit he or she has filed. Approval is likely as long as the plaintiff has a “good” case. A “good” case is one with significant value that is likely to be resolved in his or her favor.
To win this type of lawsuit, a plaintiff must prove that the other party had a legal obligation to keep him or her free from harm. The plaintiff must also prove that the other party breached this duty by being careless or reckless. Furthermore, the plaintiff must prove that this carelessness or recklessness caused or contributed to the accident in which he or she was hurt. For a plaintiff, a successful personal injury case ends with a judgment for compensation. Achieving this result can take months, or even years.
In reality, however, most personal injury cases do not go to trial. Instead they are resolved through negotiated settlements out of court. This often spares a plaintiff considerable expense. Even so, an accident victim with little or no income while their case is pending may be tempted to accept a low offer from the other party’s insurance company. Getting a pre-settlement funding can alleviate this pressure and give the accident victim’s lawyer time to negotiate a fair deal.
If you think you may have a case for a personal injury suit, but aren’t entirely sure, it’s worth talking to a lawyer to get their perspective. They can help you determine the most appropriate next steps.
Regulation of Pre-Settlement Funding
Those who dislike the legal funding industry say it is unable to police itself. Accordingly, they have long maintained that government intervention and regulation is warranted to protect unsuspecting consumers from greedy and unscrupulous lawsuit lenders. As a result, some states have outlawed legal funding completely. Other states have mandated that legal funding companies register as a legal funding company. In some other states, the legal funding company may need to be licensed as a lender and, thus, subject to lending regulations.
Lawsuit funding companies have also taken matters into their own hands where there aren’t specific regulations governing the industry. Specifically, they have demonstrated a commitment to honest dealings and transparency by following best practices established by New York’s chief attorney at the request of industry insiders several years ago.
Legal funding providers must include the following disclosures on written contracts, among other things:
- Complete disclosure of the total amount the consumer will receive.
- A comprehensive breakdown of any relevant fees, including how they are calculated and applied.
- A comprehensive explanation of the total repayment amount that would come due every six months and advanced to three years following the contract date, including fees and a minimum payment amount.
- The consumer’s right to rescind the deal within five days after it is finalized.
Oasis has also demonstrated its commitment to excellence and honesty in business as an original partner in the ARC, the Alliance for Responsible Consumer Lending. We have also earned an A rating from the Better Business Bureau, and a four-star rating from Trustpilot. Most importantly we have helped more than 250,000 individuals and families, by helping them obtain critical financial relief.
Oasis provides pre-settlement funding, also known as consumer litigation funding, to its customers through different products depending on their state of residence or cause of action. Many consumers will be provided pre-settlement funding in the form of a purchase agreement, which assigns a portion of the pending proceeds from their legal claim. Other consumers, such as those in CO, IL, MN, MO, SC, WI and some OK residents, will be offered a funding in the form of a pre-settlement loan, sometimes referred to as a lawsuit loan. These transactions have important differences, therefore, consumers should carefully review and be aware of the type of transaction that is offered to them by any funding company.