For those people who find themselves financially stressed in the middle of a costly lawsuit, a lawsuit settlement loan can be a great lifeline. They will be able to finance their lawsuit, and take care of their personal expenses. Since they are relieved of their financial problems, they will be able to wait, even for a long time, to get a fair settlement. However, a lawsuit settlement loan can be costly. It is important that you do your homework. Make sure you know the right questions to ask while opting for a settlement funding. The idea is to keep the potentially prohibitive costs to a minimum. It is also important to choose a regulated and reputable company as your settlement loan provider. Settlement Lenders are the experts in Canada and have helped tens of thousands of Canadians get better settlements over the past 35 years.
Interest rates and fees
The main downside of the settlement funding industry is that lawsuits themselves can take a long time to play out and settle, so if you have a settlement loan, there is a long time for the loan to accrue interest. So, the first question that you have to ask the lending company is about the interest rate. A reputable company, like Settlement Lenders (www.settlementlenders.com), will give you a straightforward answer. They will tell you the exact interest rates they charge, and about any other fees. If the lending company that you contact for a settlement loan does not give you a direct answer, then be wary. Many companies levy additional charges as well, such as administrative or application fees. Check with the company whether after a specific period of time, they provide a cap on the accumulation of interest and fees.
Terms and conditions
Going through the fine print about the settlement funding of a lending company can be a headache, but that is exactly what you should do. Even if it takes a lot of time, do it. Get the help of your attorney. Make sure that you understand all the terms and conditions, before going ahead with applying for the loan. You should also make sure that you feel comfortable with your settlement loan provider, including your actual associate who is handling your file.
Conflict of interest
Make sure that the funding company you choose has no financial obligations to your lawyer or to any medical provider involved in your lawsuit. It is alright if your lawyer refers you to a particular funding company or lender though if they are basing that recommendation on past clients having good experiences. If the lawyer has a stake in that company they are referring you to, then that would be a conflict of interest.
See whether there is an alternative
If there is another way to find money, such as borrowing from your friends/family or taking up a second job, then go for it. You may even opt for a flex loan from a reputable company like Cashco Financial that is also a Canadian company. Note that you cannot ask your attorney for a loan. Professional ethics mandate that an attorney cannot lend his/her clients, any money. The attorney is there to represent you. Of course, you can still resort to him/her for all legal aides.
After finding the right funding company, make sure that you borrow only what you truly need to survive. Just because a lending company is willing to provide you with up to $100,000 because of the merits of your lawsuit, it does not mean that you have to take the whole amount. Check to see if there are different payout options apart from lump sum transactions.
I honestly believe that people skip some of these steps when getting a loan to settle a lawsuit. And that is probably driven by anxiety and fear and relief. Anxiety at facing this lawsuit; fear at finding the money to pay and then relief when there is “wonderful” solution.
Spot on Dannielle, I believe the length of the procedures also contributes as it could span years.