What Can I Use Lawsuit Settlement Loans For?

If you have a pending lawsuit, you may have considered obtaining a lawsuit settlement loan to defray some of your legal or other expenses. While there are no legal restrictions on how you may use a lawsuit settlement loan, it's still a good idea to use your loan conservatively.

How Lawsuit Settlement Loans Work

Your lender will consult with your lawyer about your lawsuit, and together they will estimate the size of the potential award. The lender will then offer you a percentage of that possible award--usually between 10 and 25 percent.

The good news is that you do not have to repay this loan if you lose your case. However, depending on the contract you have with your lawyer, he or she may be entitled to some of the payment you receive in exchange for his or her time and services rendered while negotiating the loan with your lender.

Uses for Lawsuit Settlement Loans

There are no rules stating what you can or cannot use a lawsuit settlement loan for, but most experts suggest that you use it to pay for regular living expenses while you are awaiting settlement of your suit. Others suggest that you use it to cover legal expenses for the case itself.

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