Lawsuit Funding 101

October 1st, 2014

Quick outline of what exactly lawsuit funding is:

Lawsuit funding involves a cash advance by a lawsuit funding company to a personal injury plaintiff in exchange for a promise by the plaintiff to repay the amount of the advance plus interest, if and when the plaintiff receives a settlement or judgment with respect to his or her lawsuit. Plaintiffs often need this cash advance to help pay bills while they wait for their case to be resolved, particularly because it can often take 6 to 24 months, or even longer, to reach a case settlement or judgment. Lawsuit funding companies help people “bridge” the gap between when an accident occurs and when the plaintiff receives a payout in connection with his or her case.

The cash advance given by the lawsuit funding company is not considered a loan due to the fact that the plaintiff will not have any obligation to repay the cash advance if he or she loses the case. If you have a loan on your house or your car, you are required to make a monthly payment. But not with lawsuit funding. You only pay if and when your case is successfully settled or you receive a judgment. You also do not make any monthly payments. All payments are made at the end when the case settles or reaches a judgment.

Most lawsuit funding companies focus on motor vehicle accident cases or “MVA” cases and the average advance will be in the $500-$5,000 range. However, lawsuit funding companies make loans to many different kinds of personal injury plaintiffs and such companies are often willing to make much larger cash advances if a plaintiff has a particularly strong case and expects to receive a significant payout. Please take a look at our website for a list of all the cases we fund – www.lawsuitfundingsolutions.com

Call us today if you have any questions about lawsuit funding. Thanks.

A Quick Guide in Applying for Lawsuit Funding

September 23rd, 2014

There are a bunch of lawsuit funding companies to choose from and the numbers continue to grow. How do you know which lawsuit funding company is right for you? Obviously we would love it if you thought LawSuit Funding Solutions was the right funding company for you and your needs but we understand if you choose to go with another lawsuit funding company for a cash advance. Below is a quick guide in choosing the correct lawsuit funding company:

-Come up with a list of questions you may have for the underwriter or operator when you call. Make sure they answer all of your questions so you feel 100% comfortable in the process and the company.
-The biggest problem I have with other lawsuit lenders is they will never reveal or tell a client what their rate will be or how much they will owe. If a lawsuit funding company cannot tell you what their rates will be on a cash advance or if you do not understand how the interest/fee structure works, move on and fast.
-Apply with 1 lawsuit funding company. While you think this improves your chances, what it really does is wear out your paralegal and/or attorney who is sending documents 6 different times to each person requesting it. Some law firms will bill you for this! Because you need money quickly, you will need the firm to work quickly. Applying with many funders at once slows everyone down.
-Once you find the right lawsuit funding company, carefully review the cash advance agreement. What the company told you over the phone and what is on the cash agreement could be two totally different things. Again, make sure you are 100% comfortable in the agreement especially what the Total Amount Owed will be once your case receives a settlement or judgment.
-Understand that the advance process may take 24 to 48 hours to complete, if not longer depending how responsive your attorney is and how big of a case you have. Take your time. Do not take the first lawsuit cash advance you get if you don’t feel 100% ready.
-Less is more in the end. Lawsuit cash advances are expensive. Other lawsuit funding companies will never tell you that but we will. It can cost anywhere between 2-3% per month to get a cash advance from Lawsuit Funding Solutions and it is a lot more to borrow from other lawsuit funders. Therefore, only borrow the amount that is really necessary. Do not borrow $10,000 if you only need half of that. A lawsuit cash advance should be for necessary expenses = pay the rent/mortgage, heating bill, kid’s school expenses, etc.

Hopefully this will give you some supportive information to assist you in making the best decision possible. Fill out our application and see if LawSuit Funding Solutions is the right choice for you. We would love to help you in your financial time of need and get you to finish line in your case.

Thanks and call LFS at 267.546.3933 if you have any questions or would like to a quick application.

Legal Intelligencer Article About LFS

September 2nd, 2014

Litigation loans for clients in dire need of money to pay the rent or for an attorney trying to cover case expenses are generally viewed by lawyers as a costly option of last resort.
That perception is part of a stigma that litigation lender Brian Walters said the industry has justly earned, with some vendors charging astronomical interest rates and adding “big-time fees” on top of loans.
But not all litigation funding operations are the same, according to Walters, who heads Jenkintown, Pa.-based LawSuit Funding Solutions. Walters said he is trying to change lawyers’ perception of litigation funding—from something they view as more trouble than it’s worth—to a vehicle that can lead to a larger recovery for a client by providing the resources needed to see a case through, rather than settling too early due to lack of funding.
“The problem with most attorneys is they’ve all had one or two bad experiences with a litigation funding company and they shut down and say they don’t want to do this anymore,” Walters said.
Dean Lipson, who runs Blue Bell, Pa.-based Covered Bridge Capital, also said the industry has been tarnished by “bad actors.”
“There are companies out there that take advantage of consumers. An entire industry gets painted with a broad brush, I’m sure personal injury attorneys would be very sensitive to this because they seem to get attacked as well,” Lipson said.
But litigation funding can be highly beneficial, if an attorney knows what to look for in a lender, Walters said, with avoiding high interest rates being a primary concern.
“You have some companies charging 4 or 5 percent a month with big-time fees on top. A client could borrow $3,000 and owe $10,000 in three months,” Walters said. “Don’t go with the first company; you have to go out there and kick the tires, ask the right questions.”
McLaughlin & Lauricella co-founder Slade McLaughlin recalled the horror story of a client who many years ago came to him with $5,000 in litigation loans before her case had even been established.
“The interest was so out of control that when the litigation started two years later, $5,000 had grown to $90,000,” McLaughlin said.
However, McLaughlin said litigation loans are sometimes a “necessary evil” and finding companies with reasonable rates and establishing a ongoing relationship with them is key to effectively utilizing litigation funding.
“I work with companies that are very reasonable,” McLaughlin said. “If the client borrows $5,000, the client will never owe more than double, $10,000.”
Matthew Casey of Ross Feller Casey said it’s important for lawyers to understand when the subject of litigation funding comes up, that they are not their client’s financial adviser and that the client has to make his or her own decision on whether to pursue a loan.
“Having said that, it is inevitable, especially for a family confronting catastrophic injury, that funding needs arrive prior to the conclusion of the litigation,” Casey said.
Casey added, “Unless the funding needs relate to essential activities of daily living like shelter, food, and clothing and perhaps medical necessities, we tend to discourage our clients from seeking funding that may have a higher than usual interest rate.”
McLaughlin said he won’t allow clients to borrow money unless their case is strong, and under that same principle, some lenders won’t offer money.
For Walters, “the biggest thing we look at is who the attorney is,” he said.
“If the attorney takes strong cases and has a good win percentage, that’s the number one thing we look at,” he continued. “Number two is how strong the case is and what the client is going to use that money for.”
Lipson said in addition to examining the client’s injuries and liability theories, he also looks at insurance.
“We want to make sure that if the client does prevail, there’s going to be an insurance company there to pay the claim at the end of the day,” Lipson said.
Walters said the vetting process and building a rapport with attorneys helps to establish a good reputation in the field.
“Our business thrives on regulars, and when I say regulars I mean the attorney. A lot of the national companies have their commercials on TV” directed toward the plaintiff, Walters said, “but we’re going to pitch to the attorney, and pitch to him about why we’re the best out there … I’m looking to work with the attorneys over the next 15 to 20 years, I’m looking to foster those relationships.”
Lipson added that despite the stigma, the demand for litigation funding is increasing.
“The demand is huge and I think a big part of it is that insurance companies are playing hardball,” Lipson said. “They don’t want to pay reasonable amounts that should be commensurate with the case. Everything is a lowball and that has created this market.”
But with that demand comes a slew of competitors, Walters and Lipson said.
“It’s gotten very competitive because there’s no barrier to entry,” Lipson said. “If you’ve got a couple dollars and a friend who’s an attorney, you’re in business.”
Given the ease in which a litigation funding vendor can spring up, Lipson said he believes tighter regulation of the industry is coming.
Litigation funding “is a solution to a market problem, and then ultimately someone will complain because there are some bad actors out there that will prompt the legislature to regulate it,” Lipson said. “These days we have layer upon layer of government, there’s nothing out there that’s not regulated.”
In terms of loans for the purpose of footing litigation expenses such as discovery costs or hiring experts, some attorneys feel that it is never a good idea.
Scott Cooper of Schmidt Kramer in Harrisburg said using litigation funding to cover case expenses inherently leads to conflicts.
For example, Cooper said if a lawyer is loaned $100,000 for a case and is offered a settlement lower than the desired value by a defendant, that lawyer might be tempted to tell his or her client to accept the settlement in order to be able to pay back the loan, rather than risk going to trial and losing, thus putting the attorney in debt.
“If you’re doing personal injury work and you’re saying you’re good at it, you should be able to advance the cost and put your money where your mouth is. Or you refer the case out,” Cooper said.
P.J. D’Annunzio can be contacted at 215-557-2315 or pdannunzio@alm.com. Follow him on Twitter @PJDannunzioTLI.

Lawsuit Funding Process

July 14th, 2014

In order to Apply for Lawsuit Funding, you must do the following:

1. Call or Email our offices at 267.546.3933. We will take down your basic information and ask a few questions about your case.

2. After the application, we will contact your attorney and ask a few questions and request a few documents depending on the case – such as a police report, complaint, etc.

3. Once we receive the necessary documents, we will have an answer to you in 24-48 hours. We will let you know if we can fund, and how much we can fund.

Call or email us today.

Thanks

LFS
267.546.3933
rpierce@lawsuitfs.com

What to do while you wait for you Lawsuit to Settle

June 4th, 2014

Settling or receiving an advance on your case can take a long time. What happens when you cannot work and the bills continue to pile up. You are now 3 months behind on your rent or you haven’t paid your water bill since March.

When this occurs, many times plaintiffs will contact their attorney desperate to settle a case when there seems to be no other option to pay the bills. Personal injury attorneys know this is not in a plaintiffs’ best interest, but what can they do?

One option would be for the plaintiffs to contact their creditors and request deferment of debt until the case is settled. Sometimes the creditors will accept, sometimes they will not. If they do not, the creditors have every right to go after the plaintiffs for the money they are owed.

If the plaintiff’s home, health, or daily needs are in jeopardy, attorneys may suggest that their client contact a litigation funding company. Lawsuit funding fills a critical financial need for seriously injured victims in a pending claim that could take many months or years to resolve. Unlike a traditional bank loan, obtaining lawsuit funding requires no credit check, no employment verification, and no monthly payments. The lawsuit cash advance is based completely on the strength of the case. Furthermore, if there is no recovery, the plaintiff keeps the cash advance and pays nothing to the funding company.

Litigation funding is a great way for plaintiffs “to hang in there” until there case settles or receives a judgment. Instead of panicking and taking a lower offer, litigation funding allows the plaintiff to take a no-risk cash advance on the future proceeds of their case.

Lawsuit Funding – Pros and Cons

May 4th, 2014

The Pros and Cons of Lawsuit Funding

One misconception we always hear from attorneys is that they get nothing from a client or plaintiff receiving an advance. True and untrue. True to the point that it is illegal for an attorney to benefit financially from a client receiving an advance. Lawsuit funding companies are not allowed to pay an attorney anything to get their client to receive an advance.

But, it is 100% untrue that an attorney ultimately will not benefit from their client receiving an advance. One of the main reasons a plaintiff should think about getting a lawsuit advance is in order to get the full proceeds from what a case is worth. Let me give you a quick example of what I mean. An attorney is working on a personal injury case and receives an offer of $20,000 from the insurance company. The attorney feels that the offer is about 20% of what the true value of the case is actually worth – i.e. $100,000 – but has an obligation to report the offer to his/her client. The client wants to take the $20,000 offer and does not care if the case is worth $100,000. The client needs the money now and cannot wait another 6-12 months for the case to settle. They are now 3 months behind on their rent and a $20,000 settlement is looking great for their current needs.

This is a perfect case when lawsuit funding can help not only a client’s current needs but the attorney’s as well. Lawsuit Funding can enter the picture and help the client catch up on the 3 months of rent and other bills that are becoming major problems. By getting an advance of a few thousand dollars now, the client can hang in there and wait for his/her attorney to try and get the true value of the case = $100,000.

So how does that help the attorney? Most attorneys get a fee on the case between 30-40%. Let’s take the low end at 30% to keep it simple. If the client’s case settles for $20,000, then an attorney is going to get a fee of $6,000. But, if lawsuit funding is able to allow the client to pursue and obtain the settlement they deserve at $100,000, then an attorney’s fee jumps from $6,000 to now $30,000. That is an extra $24,000.

Now to the negative aspect of lawsuit funding. Lawsuit funding is not cheap. If a plaintiff borrows $5,000 and the case settles in 6 months, a plaintiff would owe around $6,000 on their advance. That’s an expensive loan. Whereas most banks charge around 6% per year and credit cards charge around 18% per year, lawsuit advances charge in the 30% range.

Why so much? The simple reason is a lawsuit advance is a non-recourse loan meaning the plaintiff owes nothing if they lose their case. The lawsuit funding company’s collateral is the case and the case alone. If the case goes South, the funding company is out their advance amount. In turn, these companies will charge a higher interest amount. A good rate for a lawsuit advance is 2-3% per month or 24-36% per annum. There are national companies that will charge outrageous rates of anywhere between 4-5% per month or even higher. These are the companies a plaintiff needs to be careful of. These companies prey on the desperation of a plaintiff who does not care what they are getting charged but only care about getting their rent paid, their heating bill paid, or putting food on the table.

This is why plaintiffs need to be very careful and to do their homework on what company they are choosing funding from. The plaintiff needs to truly have to have an immediate need for a lawsuit advance. If a plaintiff is planning on using this funding for a new TV or to go on a vacation, a lawsuit advance is not right for them.

Why Litigation Cash Advances Only Cost Money if you WIN

May 1st, 2014

When you get a loan from a bank, you have to put up some form of collateral to get the loan. Whether it’s your house, car, etc., the bank requires some form of collateral to secure the loan. If you default on the loan, the bank will go after you for payment from whatever your collateral on the loan is.

But not with a litigation cash advance. When you get a cash advance on your personal injury case, the collateral is your case and your case alone. If you end up losing your case, you owe absolutely nothing back. Litigation funding companies are basically taking a bet on your case being successful. It’s a great way for a plaintiff to get money now with no risk while they wait for their case to settle.

Just remember, due to the fact that the only collateral these companies have is your case and if the case goes South then they are out money, these litigation funding companies charge more than a regular loan. Just be careful who you choose and make sure you choose the right company for you and your family’s needs. Call us today if you have any questions @ 888.697.7352.

Good Luck.

Questions that Lawsuit Funding Companies Typically Ask

April 22nd, 2014

When you call a lawsuit or litigation funding company, be prepared to answer some basic questions. The lawsuit funding company is quickly trying to get a read on the strength of your case and whether or not it is worth their time and effort to underwrite the case and potentially fund your case. Here are some common questions:
1. Your Name, Address, Phone #
2. Your attorney
3. Type of Case (MVA, Med Mal, Slip N Fall, etc.)
4. Date of Accident (DOA)
5. Advance Request Amount
6. Insurance Carrier
7. Type of Injuries

Once a lawsuit funding company receives adequate answers to the questions above, they will usually contact your attorney or paralegal to try and get the advance approved. If you are thinking about getting a cash advance on your case, try and be prepared to answer the above questions. If you cannot, it will be a lot more difficult to receive an advance and be taken seriously.

Good luck and call Lawsuit Funding Solutions today if you have any questions.
888.697.7358

Timing of Lawsuits

April 14th, 2014

Many people think that once they get into a lawsuit that the insurance company for the defendant will offer them a fair settlement and they will get their payment from the proceeds of the case and move on. Unfortunately it doesn’t always work like that.

Personal injury claims can take a long time to get done. For instance, most of the work we do is on the East Coast. On average, personal injury cases around here can take anywhere between 24-36 months to get done. But some cases can take a lot longer than that. Medical Malpractice cases can take a lot longer with some cases taking 5-10 years to get done. Motor Vehicle Accidents take a lot less time because there usually aren’t any liability issues and the insurance company can quickly figure out what the value of the case is.

If you have a personal injury claim, expect the case to take a couple of years to get done. The longer the case takes, the more a plaintiff will be in need of some financial assistance. That is where can help. Call us today and see if your case qualifies for a cash advance.

What is Needed to get Approved for Lawsuit Funding

March 12th, 2014

Litigation Funding is defined as a cash advance for a plaintiff who is waiting for their case to settle or receive a judgment.

In you want to see if you qualify, our process is as follows:
1. Call our office at 1-267-546-3933.
2. We will call your attorney a few questions to evaluate the case.
3. If approved, we fax or email the agreement and once signed, funds are either wired or a check is sent via regular mail or Fed Ex.

What we don’t require:
1. Any payments – everything is paid if and when the case settles
2. Credit checks
3. Employment
4. Repaying the advance if the case is lost

Contact us today if you want to learn more.