4 Types of Cases that Qualify for a Pre-Settlement Loan

If you need money to fund a lawsuit, you may be able to secure a pre-settlement loan. This is a cash advance on the fees you anticipate receiving when you successfully complete your lawsuit. The loans are considered very high risk, and they are expensive as a result. However, if you qualify based on the type of lawsuit you are filing and your credit, lawsuit loans are a viable option. To qualify, the lawsuit you are filing will have to be a settlement suit.

#1 Class Action

Class action cases are not extremely common. Most individuals will go through life never being a part of this type of litigation. They occur when one party, usually a corporation, creates a product or service that presents a hazard to many. Those individuals bind together against the much larger corporation, which usually has vast resources and excellent legal representation. If you are part of a class action suit, you may be anticipating a settlement. Settlements range from a few thousand to a few hundred thousand dollars in most cases. To be a part of the lawsuit, you may have to provide a nominal fee. A loan against your pending settlement can cover that fee.

#2 Liability Lawsuits

Liability cases are filed when a person or group of people behaves negligently and harms another individual or group of people. For example, if you are filing a slip-and-fall lawsuit against your local grocer who did not post a "wet floor" sign, you are filing a liability lawsuit. Again, these settlements range drastically. Some are intended to cover only medical expenses, while others cover the vast number of expenses that can fall into the "pain and suffering" or "damages" category. You will qualify for a lawsuit loan only if the lender determines there is near certainty you will win your case.

#3 Divorce or Child Support

An actual divorce case will not typically qualify for a pre-settlement loan; however, a subsequent lawsuit where one party is attempting to recover a settlement for the divorce, such as child support, may qualify. If you are suing your ex-spouse to recover fees owed to you as a result of your divorce arrangement, then a pre-settlement loan may be accessible. This can be an easy case to win if you have a legal contract from the divorce explicitly stating the other party owes you the money. The lender will check to see that that party is in good financial standing, though, before extending the funds.

#4 Wrongful Termination

Wrongful termination suits against an employer can result in settlements to a previous employee. These suits almost always end in settlement because it is typically far less expensive for the corporation to settle than to pay for ongoing litigation. If you are suing a previous employer, the lender will want to assure you have a good case, and then an advance would be likely. You do need to pass a credit check and background check. If you have filed a similar suit in the past, your chances of a loan could be lessened.


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