Accident Lawsuit Funding

Based on the prior experiences that funding companies have had with personal injury cases, they determine for themselves the amount of any non-recourse cash advance they will offer to an injured person. They almost always base this decision on the facts provided to them by the plaintiff's attorney. However, in Florida, and possibly elsewhere, a lawyer is currently not permitted to take part in any way in a pre-settlement financing process.

This state-mandated prohibition means that the lawyer cannot provide any information about the case to an investment company. In those circumstances, the injured party will not be able to get non-recourse funds. At times, a law firm is also able to obtain a cash advance to cover some of the ongoing expenses incurred with a long, drawn-out lawsuit. However, in Florida, they also would be unlikely to obtain such relief.

Such a lack of help, even with the high interest rates that would have been charged, leaves an injured person with only one other option, that of obtaining a personal loan. In order to obtain a traditional loan, the injured party must still have assets to use as collateral, as a rule. This can be problematic, if he has been forced to spend down to almost nothing.

The pending settlement itself may or may not seem an acceptable and reliable source of repayment to the loan company. The fact is that, unlike a non-recourse advance, a loan does have to be repaid, regardless of the outcome of the trial. A plaintiff may be awarded a smaller settlement than expected, or the defendant could win the case. Either way, it's important to have either non-recourse funding or a secure way to pay back the loan.