If the claimant can't find any other way to get money, a lawsuit cash advance can help them win a personal injury lawsuit. People have borrowed money from family, sold valuables, and taken out loans to pay for services related to their lawsuits, but there is an easier and often cheaper way: working with a cash advance company. Legal advances can help the client move forward with the case by helping to pay for personal costs that are needed for the lawsuit. Companies like Legal Advances can give you a lawsuit cash advance so that you can go to court and win your case.
Some companies have charged effective interest rates of more than 100% per year, but the business is usually not covered by money lending laws and hasn't gotten the same negative attention as, say, the payday loan industry, which has been accused of "predatory lending." But that may be about to change. Eliot Spitzer, the New York Attorney General, has reached settlements with at least ten litigation-cash-advance firms that require clearer disclosure of fees. One of these firms, based in New Jersey, charged a client $19,000 for a $3,000 cash advance made two and a half years ago. (This business later agreed to take less money.)
Industry publications have said that we shouldn't assume that the legal finance company is making a very high return on its cash advances overall, since it will lose the money in cases where the plaintiffs don't get a verdict or a settlement. But this again points to a close similarity with subprime lenders, many of whom also have to write off a large portion of their debts because they can't be paid.
To get litigation funding from a third party like Legal Advances, the claimant's lawyer will have to give all the information needed for review. Once Legal Advances looks at the case and talks to the lawyer, they will decide whether or not to give the claimant a lawsuit cash advance based on how likely they think they are to win in court. Remember that this cash advance is not a loan because the claimant does not have to pay back the money if the case is lost.
Before signing up with the cash advance company, the claimant must know how much money he or she will get if the case is won. This way, there won't be any surprises at the end, and the claimant will also know how much to pay back if the defendant pays money.
