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The majority of clients facing a lawsuit often find the difference between a pre-settlement cash loan and lawsuit loans to be confusing. The idea of both being dealt with when facing a lawsuit is correct; therefore, many individuals will believe that each operates in the same or at least a similar manner. Despite this misconception, there is a difference between a pre-settlement funding and lawsuit funding. So, using the terms interchangeably is not advised.
When identifying the difference, a person potentially wonders if one is more beneficial than the other. This will be discussed in this article and further clarity will be placed on the difference between a pre-settlement cash loans and lawsuit loans.
How Does Pre-Settlement Differ From Lawsuit Funding?
Firstly, the lawsuit loan is more general and broader term utilized to define the method whereby plaintiffs can be assisted with lawsuits that are currently pending or are settled. The pre-settlement cash loan or funding offers a similar service; however, it deals with cases that are not settled. Basically, the difference lies in the stage of the case with the pre-settlement cash loan being offered in the earlier states of a lawsuit.
How Can Party Quality For Pre-Settlement Cash Loans Or Lawsuit Funding?
To explain whether or not a party can qualify for lawsuit funding or pre-settlement cash loans, it is important to answer specific questions – particularly in the case of personal injury. The questions include the issues of liability, damage to the plaintiff, and any insurance available to cover the injured party.
If liability cannot be clearly defined, it can be highly challenging to not only gain pre-settlement or lawsuit cash advance, but also be successful at the end of the lawsuit.
The damages to the plaintiff can include several types of damages ranging from physical injury, loss of wages, or any other type of ailment. Lawsuit funding tends to focus on the physical injury or wage loss when considering the application.
It can be difficult for money lenders to collect funds from an individual who does not have any income. Insurance plays a large role when applying for lawsuit or pre-settlement funders as it impacts the amount available.
Both lawsuit funding and pre-settlement cash loan applications are reviewed and approved by underwriters who examine each case singularly. For a lawsuit funding application to be considered, the plaintiff must secure the services of a litigation attorney to represent the case on contingency. It is important to note that certain states do not allow lawsuit funding and a litigation attorney can assist with this situation.
Pre-settlement cash loans is an option available before the proceeds of the claim are received. This means that the party will receive a portion of the pre-settlement loan before the case is settled, and once the case is settled the remaining amount will be released. It is once the final amount is released that the plaintiff will be obliged to begin making repayments. No underwriter is required for this application, and the attorney is only a recommended alternative to assist with documentation.