4 Questions a Lawsuit Loan Lender Will Ask You

A lawsuit loan can be issued as a cash advance against an expected settlement to help you cover legal fees. These loans are high risk, so most traditional lenders do not issue lawsuit loans. Even alternative lenders want to get the best assurance possible that you will pay off the loan. As such, they will ask questions about both the lawsuit and your personal debt history to determine the best option moving forward.

#1 How is Your Case Proceeding?

A lawsuit loan contract typically includes verbiage that excuses you from repaying the debt if you do not recover any settlement in the case. As such, lenders need to know that you have a very good chance of recovery before issuing the loan. You will not be as likely to receive the loan if you haven't spoken with a lawyer or begun your legal proceedings at this point. Borrowers who are already in the process of the case and expect a resolution in the near future will have more success with a lawsuit loan than those just at the beginning of what could be a long process of litigation.

#2 Have You Taken a Lawsuit Loan Before?

It may not seem relevant to your current case, but there are some red flags that pop up for lenders, and a history of taking lawsuit loans is one of them. Individuals who take multiple lawsuit loans have filed multiple lawsuits. It may be that you have had occasion to file the suits through no fault of your own. However, it may also mean that you are a litigious person who has sued multiple times in attempt to recover funds from another party. This can compromise your ability to win the case at hand, and it can compromise your ability to get a loan as a result.

#3 Do You Have a Criminal Record?

A criminal record can significantly hamper your perceived character in both a courtroom and a loan application. A criminal record will not necessarily exclude you from receiving a loan, but the nature of your prior offenses may. For example, if you are involved in a sexual harassment law suit, but are a registered sex offender, a lender may question your ability to win that case. Use common sense to determine if your criminal record could be of concern to the lender in this type of situation.

#4 Do You Have Other Debts?

Your income will not be a huge factor on a lawsuit loan application because the lender is making a loan against the expected settlement. One thing that could cause a problem, however, is a high amount of other debts. This would mean that you may, even with the settlement, have difficulty repaying the debt to the lawsuit loan lender. You should have a low debt to asset ratio in order to head off any concern that you will have difficulty repaying. Additionally, the lender will run a standard credit check to assure you have a history of repaying any debts you have incurred in the past. 

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