Pre-settlement loan for plaintiffs – Yonkers Tribune.
YONKERS, WESTCHESTER COUNTY, NY – July 17, 2022 – Did you know you can get cash for an expected settlement before the court clears the court? Many plaintiffs struggle to get their money in order, even as they work their way through the legal system. loan in advance exist to reduce this burden.
What is a pre-financing loan?
Plaintiffs in a civil suit who are actively seeking a settlement from another party may receive a pre-settlement loan of between $1,500 and $1,000,000 (sometimes more) depending on the nature of their case and the expected outcome. The lender transfers the money to the plaintiff in exchange for a signed agreement stating that they will receive a percentage of the settlement to pay back the loan.
Let’s see an example of how this might work to get a better idea.
- The plaintiff is involved in a civil suit in which the lender believes the expected settlement will be $50,000 after attorneys’ fees.
- The lender agrees to loan the plaintiff $20,000 up front at the agreed rate.
- Plaintiff accepts the cash and agrees to repay $22,000 (loan amount plus interest) if his settlement is reached.
- Plaintiff will receive the $20,000 in cash immediately.
- Plaintiff will return $22,000 from her $50,000 settlement upon receipt.
The plaintiff was immediately awarded $20,000. However, they only pay back $22,000 when they receive their severance pay. So you pay $2,000 to immediately free up cash for immediate use. This instant cash can be the financial fuel they need to keep chasing their legal money. It’s worth doing if you think you can win your lawsuit and move on.
A lawyer must agree
To reduce the risk of someone taking on more than they can afford, or assuming they’ll win their settlement when that’s all but guaranteed, a lawyer needs to speak directly to the lender and the client. The solicitor must give the client the green light to borrow these funds before it is allowed. This requirement is there to ensure that the attorney has placed his seal on the agreement and that the attorney believes there is a high probability that the settlement will work as the plaintiff hopes.
The other major reason lawyers must contact lenders before signing off on a client receiving funds is that they need to show the lender what type of case the client is bringing to court. In addition, the lender must know what benchmark he is aiming for in this case before he can offer the customer a loan amount. After all, they’re flying blind if they don’t know the likely settlement amount from that deal.
Given all of these facts, a plaintiff may need to act quickly to line up all of his ducks so that he can borrow the necessary funds with his attorney’s permission. The worst that could happen is that they wait too long and run out of money. No one wants to see that because they should be able to take their case to court immediately.