A lengthy legal process, burdened by mounting medical costs and lost wages, can be financially devastating for most.
While funds received during the pre-settlement phase can provide necessary relief, one must still ask the right questions before finalizing any cash advance.
This ensures that the terms are clear, sustainable, and won’t come back to haunt them when it comes time to receive the settlement.
Have no idea what you should ask before accepting financial support during a lawsuit? If so, stay with us to break down the eight must-ask questions below.
1. Is the Agreement Non-Recourse?
This is the most important question you can ask. In the legal funding industry, cash advances are technically non-recourse. This means that if you lose your case, you are not required to repay the money. Always get written proof that the contract is non-recourse so you are completely protected from personal financial risk.
2. What are the Real Costs & Fees?
Many people refer to these financial advances as lawsuit loans, but it is actually cash advances based on your future settlement. You must determine if the provider is charging simple interest or compound interest. The more you understand your fee structure and your out-of-pocket costs before you start paying, the greater the impact that compound interest will have on your repayment amount.
3. Will My Attorney Be Involved?
A reputable funding company will work directly with your legal counsel. Your lawyer will need to review and sign off on the funding agreement to ensure it aligns with the strategy and ethics of your case. If a lender tries to bypass your attorney, it is a major red flag.
4. Are There Any Upfront Out-of-Pocket Fees?
Applying for legal funding should never require you to pay out-of-pocket fees. Ask the company whether any application or processing fees are required before they review your case. A reputable company will not ask you to pay a fee up front for an application.
5. Can I Cancel the Agreement?
You should have the freedom to change your mind if you discover better alternatives. Inquire whether the provider offers a “cooling-off” period that lets you cancel the contract within a specific number of days without any penalties.
6. What If the Case Takes Longer Than Expected?
A few personal injury cases can last for months or perhaps years. It’s important that you question how the repayment terms change over time, and whether there’s a maximum amount of money that you will be liable for.
7. Does the Company Have a Good Reputation?
Not every pre-settlement finance provider is created equally. Shop around firms like USClaims and read customer testimonials to gauge transparency, honesty, and the quality of customer service before signing on the dotted line.
8. How Quickly Will I Receive the Funds?
When you are struggling with daily living expenses, you cannot afford to wait weeks for approval. Inquire about the average processing time to ensure you receive the financial assistance you require within the stipulated time.
