- November 15, 2017
- Jeffrey A. Rubin
Lawsuit Funding is Not A Bank Loan:
Lawsuit funding has many benefits. However, if people begin to compare accident funding to bank loans they are going to be very confused. Legal funding is not a loan. The advance is non-recourse meaning it does not have to be repaid if the litigation is not successful. Moreover, no payments of any kind in lawsuit funding exist until the case settles or there is a judgment. Lawsuit funding is not actually a debt. Therefore, there is no reporting to credit bureaus and credit ratings are not affected by it.
Pre Settlement Funding is Not a Credit Card:
People used to turn to banks or credit cards to pay necessary expenses. They would often max out on those cards or default on the bank loans to cover costs or other expenses. Whether successful or not you always had to pay back the bank loan and the credit card company. This means burdens of monthly payments and credit cards that were maxed out. Enter the pre settlement funding industry. Due to the lack of credit was born the legal financing industry.
Enter Accident Funding:
There are however limitations and considerations in accident funding. In most states attorneys are forbidden to advance funds to their clients or charge interest. Therefore lawsuit funding companies entered into this vacuum in the mid 1990’s. There are now literally hundreds of lawsuit funding companies throughout the United States. These companies can customize different types of options and plans to their customers. The length of a lawsuit can be expensive. Legal funding funding can help minimize those cost during the process.
Why would a person need to borrow money? Costs to the individual client or litigant can be mortgages, rent, cell phone or electric bills or medical bills. If the money is being used to cover the cost of the litigation then most often the borrower is the lawyer. When the borrower is the client the funds can be used for many many different reasons. Legal funding covers those urgent needs and allows the client a certain piece of mind. This further allows them to have their lawsuit continue without the financial burden of having to wait for their money.
Lawsuit Funding is Easy Money :
Lawsuit financing is helpful to the person who does not otherwise have access to banks due to their poor credit. These people would be able to access lawsuit funding due to the quality of their lawsuit or potential settlement. This would also apply to people who would not qualify for a credit cards. They would qualify for lawsuit funding on the basis of the quality of their lawsuit. Before legal funding, clients with large bills would be forced to settle their case for less. This was because they had to pay bills to meet their needs
Before Pre Settlement Funding:
A person in need would no longer have to settle for pennies on the dollar. Those people can now turn to lawsuit funding to alleviate and to compete more fairly in the lawsuit. Lawsuit funding, therefore has significant benefits for people on the lower economic ladder. One must be mindful, however, of which lawsuit funding company one chooses. Often the interest rate on the cash advance is so high that the client might end up owing more to the lawsuit funding company then they are expecting in the litigation.
Why Redwood Funding Group:
The founders of Redwood Funding Group are lawyers, not bankers. We realized that clients were having trouble covering their bills during the pendency of their lawsuit. However, the available pre settlement funding companies just charged too much money to make an advance worthwhile. Most accident funding companies had very high fees. They would add those fees to the principal being borrowed. The client was then paying interest on principal and fees but only received the fees. The clients sometimes ended up owing more to the funder than he got in the lawsuit. Enter Redwood Funding Group. Unlike most funding companies, Redwood Funding Group never charges fees in any form and never compounds our rate of interest. We guarantee that you will be happy with our rates and our service.
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