When to Seek Litigation Financing
The amenity that is litigation finance needs you to understand how it works before diving right in to use it. There are many who are tempted to take up the financing without understanding its implications. You, therefore, need to know how to engage the litigation finance companies out there.
Litigation finance is the amount of money made available to you to help you with the requirements of your lawsuit, to see it to its end. They shall receive their settlement, on which they are expected to pay what they took out to facilitate the case. This is not an outright loan. The money is not lent to you on your merits but the merits of your case and it’s potential victory. They do not look at an individual’s credit history or bankruptcy status.
There is usually an interest charged upon the money offered. The amount depends on which company you approached. They are placing a huge risk on themselves, seeing as a case is only certain when it is over. Their investment is not within their control. Cases that may have seemed destined for certain outcomes can quickly turn direction at the last minute. This is the main reasons for their high interest charges. This sees them make up for all the unsuccessful cases when one goes through successfully.
Apart from the interest rates, you may also face other charges on the cash advance. They are also dependent on the company you decide to use. They will include the details of those charges on the contract they bring to your lawyer to sign, and it shall be kept until your case is over. They might charge you origination fees, application fees, a documentation fee, closing costs, a premature payoff penalty, and others. They share such items with what normal loans attract.
The litigation finance amount should not be looked at as a faster way of getting your settlement. This is only an amount that helps smooth out the operations of your defense. It is therefore important not to treat it as such. There shall always be differences in these two amounts. The amount you have to pay the financier depends on the time it took from you receiving it to the time you win the case and get your settlement money. There is a need to first explore lesser strenuous means before resorting to this one.
You need to know all you can about this service before seeking it. If there were no other means, and you needed to go for this, you will be better off with such knowledge. You cannot afford to take it otherwise.