Lawsuit Loans & Lawsuit Funding, Do They Help or Hurt The Local Economy? Lawsuit Loans and Lawsuit Funding Companies have been the center of recent debate in

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Lawsuit Loan company owner Daniel Costanzo of Direct Legal Funding says, lawsuit funding companies and lawsuit loans are having a major impact on local economies in the entire United States. Plaintiff lawsuit funding began in 1997 and provides over $197,000,00 of financing annually to lawyers and victims, so what's the controversy about?

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Lawsuit loans, according to Martin Merzer of, and lawsuit funding companies are "under fire."** The fact is that Forbes magazine article by Robert Wood dated February 20, 2014 disagrees.* Most local economist think that it's "friendly fire" as opposed to Merzer. They think that lawsuit loans may spark the growth of local businesses, entrepreneurship and commerce. defines a lawsuit loan as: legal financing or litigation funding. Wikipedia suggests that these third party funding companies are not only becoming increasingly popular and valuable in the United States, but also in England and Wales. Lawsuit Funding has attracted the attention of some critics because of the structure or fees. However, it is important to realize that these third party funding companies are taking on a tremendous amount of risk because they often finance plaintiffs and lawyers in pending lawsuits and take-on 100% of the risk because these "lawsuit loans" would be more properly described as a "cash advance" instead, because in most cases if the plaintiff and lawyer loose the case they DO NOT have to pay the "cash advance" or "lawsuit loan" back.

The fact is that if someone is injured in an accident and they can't pay their bills, then they may have to settle for less with the insurance companies or get evicted or foreclosed on their homes for failure to pay. With the assistance of lawsuit loans people are able to make their mortgage payment, stay in their home, feed and cloth their family, and get every dime from the insurance company they are owed. Moreover, if they do not get a legal cash advance then that money will not be injected into the local economy. Instead that money will be help captive by the big insurance companies. Furthermore, local communities do not benefit by there residents getting kicked out of their homes.

Clearly the lawsuit funding companies like and are providing a needed service to local communities in the rebound of a historical recession. These companies help people pay their bills and get what they are owed. According to Robert W. Wood in the February 2014 edition of writes that: "lawsuit loans may also be the best way to deal with taxes on settlements depending on if the lawsuit funding company writes the deal as a pre-paid forward contract or not." Wood also points out that if this process is done incorrectly then it may produce a crippling mistake when it comes to Form 1099 filings that are required by law. ( Forward.pdf)

It seems that if you are a personal injury lawyer that needs to finance a case or if your a plaintiff that needs to pay your bills then you might want to contact to get the lowest rates guaranteed.

Google search: legal funding company. And see why is ranked on the 1st page out of over 200 million results.




Alex Hudson
Digital Network News

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Daniel Costanzo
since: 03/2014
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