Los Angeles, CA (PRWEB) September 8, 2009
Pre settlement funding, generally referred to as lawsuit loans is an advance against a pending civil lawsuit offered to plaintiffs who need money for necessities while litigating their case. Lawsuit loans are offered quickly, with no up-front or monthly fees, no credit check, no employment verification, and no collateral other than the lawsuit. If the lawsuit is ultimately lost, the plaintiff does not have to pay anything back.
Of course, this service does not come cheap. Some pre settlement funding companies charge exorbitant fees, which are compounded monthly. This means the accumulated interest is added to the principle every month so the plaintiff ends up paying interest on interest, which can become a very expensive proposition, highly exceeding the cost of a regular bank loan.
Bank loans, however, are usually not an option. With the unemployment rate surging to 9.7% in August and many plaintiffs being unable to work due to their injuries, wrongful termination, or other adversities related to their lawsuit, most plaintiffs simply do not qualify for a bank loan. In addition, even qualifying plaintiffs, without income, cannot afford to pay the monthly fees associated with traditional bank loans.
As attorneys are legally prohibited from lending money to their clients for anything other than direct litigation costs and most plaintiffs do not have wealthy families or friends willing to extend an unsecured, low-interest personal loan, for many pre settlement plaintiffs a lawsuit loan is the only means of survival. Faced with mounting debt, bankruptcy or eviction, plaintiffs turn to lawsuit loans as the only way to manage their finances during the pendency of the lawsuit. To explain this situation in a 30 second commercial spot, an average monthly interest on a lawsuit advance: 3.5%; an average low income rent in NYC $1,000.00. Not being homeless: Priceless.