For plaintiffs in personal injury cases, slip and fall lawsuit funding is often a viable source of financial help until their cases are settled. A lawsuit funding allows the plaintiff to get money on the basis of an anticipated settlement. The recipient can then use the money to cover routine expenses and/or expenses related to their injuries. This type of arrangement is also known as litigation funding,  or pre-settlement funding.

But how do you know if this is the best option for you? Here’s what you need to know about the pros and cons of lawsuit fundings to make an informed decision.

What Is a Lawsuit Funding?

Suing someone in any circumstances can be not only expensive, but also time-consuming.

The process is even more emotionally and financially daunting if you were hurt in an accident caused by someone else’s carelessness and your injury/injuries prevent you from working while your case is pending. You may soon find yourself falling behind on the mortgage, the rent, your car payments and other financial obligations. And then there are the medical bills associated with your injury/injuries.  All of this only puts additional stress on you and your loved ones when you should be focused on your recovery.

With limited options, you might be considering a lawsuit funding to help ease your financial burden until your case is resolved.

Of course, there are pros and cons to this type of arrangement.

Advantages of Lawsuit Funding

These are the two most significant advantages of lawsuit cash advances.

A Lawsuit Funding Can Tide You Over

As we have already noted, this type of transaction can provide much needed financial relief if you’re unable to cover day-to-day and unanticipated expenses while your case is pending.

Disadvantages of Lawsuit Fundings

Even if you need the money, a lawsuit funding might not be the best option for you. Here are some of the disadvantages of pursuing this option.

Lawsuit Funding can be Costly

With this type of transaction, the provider recoups not only the actual amount you received against your settlement but also any applicable charges. Depending on the specifics of your particular funding, this may mean the funding company can rightfully claim significantly more than what you actually received. However, you won’t have to pay any amount that exceeds your settlement or award.

Keep in mind that personal injury cases can sometimes drag on for months or even years before they are settled or go to trial. Because the charges associated with a lawsuit fundings grow over time, it will add up quickly.

If you are concerned about the potential for significant charges, you may want to consider other sources for immediate financial relief. Depending on your situation, these options may include insurance funds or disability payments.  If need be, consider turning to friends or relatives for help. It might also be worthwhile to seek an installment loan from your credit union or bank. Some other options include borrowing against your home equity or dipping into your retirement account, but you should only do so after you have exhausted all of your other options.  Although the last two options may seem to be less expensive alternatives in the short-term, you risk losing your house to foreclosure, or your retirement if you can’t pay back the fundings in a timely manner.

Not All Plaintiffs Qualify for a Lawsuit Funding

A litigation funding company will only agree to give you the money you need if it is confident the case can be successfully resolved. Because this causes funders to be selective, plaintiffs must sometimes apply to multiple companies before they find one that is willing to provide funding to them.

Finding a Reputable Funding Company May Also Be Challenging

Without comprehensive regulation, it can be hard to know which companies to trust.  Furthermore, without comprehensive government or industry oversight, it might be even harder to obtain appropriate resolution if you believe you’ve been wronged.  Begin by looking for a company that follows a list of best practices or rules governing the client relationship. Sources such as the Better Business Bureau also provide valuable insight through reviews and complaints. The Alliance for Responsible Consumer Legal Funding (ARC) can also be a valuable resource in seeking information about legal funding.

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 SC and CO 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.