Filing a lawsuit is difficult enough but dealing with the potential onslaught of expenses while you are waiting for a settlement can catch many people off guard. There are many options for addressing financial struggles during a lawsuit but lawsuit loans present an appealing solution for many plaintiffs.
While lawsuit loans can seem like the answer to a plaintiff’s financial problems, they still require certain criteria to be met for eligibility. Legal funding firms like Anylawsuits have an application process for a reason. It is not unusual for some applicants to not make the cut and be denied a pre-settlement loan. The following are some of the most common reasons why a lawsuit loan application has been denied.
Your Lawsuit Loan Was Denied Because You Have No Lawyer
Having an experienced personal injury attorney handling your case is not just within your best interests but a legal funding firm’s as well. Hiring a lawyer to represent you in a lawsuit significantly increases the chances of that case’s success. Deciding to forego hiring a lawyer does the exact opposite and not only decreases your odds of getting reasonable compensation from a lawsuit but it also increases the likelihood of failure.
This is the primary reason why legal funding firms make having a lawyer involved in the case you are seeking a settlement loan non-negotiable. The legal funding firm is taking a risk by offering you a non-recourse cash advance. If your lawsuit fails to get you a settlement or win your case then you are not obligated to pay back the money since it is considered an advance on the settlement you were supposed to get.
In many cases, you cannot even properly fill out a lawsuit loan application without the involvement of a lawyer. They supply important details to the firm supplying your lawsuit loan and will have to sign several documents to finalize the process.
A Lawsuit Loan Can Be Denied if You Have Reached a Limit for Funding
The term lawsuit loan is actually a bit of a misnomer when it comes to accurately describing the type of legal funding it involved. The more accurate terminology is non-recourse cash advance but in most cases, you will hear this type of legal funding referred to as a lawsuit loan, a settlement loan, a pre-settlement loan, etc.
This is quite different from a traditional loan where you borrow money and are expected to pay it back to a lender with interest month to month. A non-recourse cash advance does not involve a plaintiff borrowing the money but instead, a legal funding firm provides a cash advance in exchange for a percentage of the settlement the plaintiff is expected to get.
With that said, a plaintiff can only promise so much of their settlement to so many parties. A plaintiff has to promise a percentage of their settlement to their lawyer in what is known as a contingent fee. This is usually 30-40%. A portion of the settlement may also go towards legal fees and court costs diminishing it further. A lawsuit loan can take up another 10-20% so plaintiffs must be careful.
If you have already gotten legal funding before then you may have trouble with an additional lawsuit loan application because it may be determined that your settlement may have no room for further funding. Be honest in an application form about whether or not you have gotten legal funding before. A firm will find out and your claim will be denied.
Settlement Loans Can Be Denied Over Case Viability
Sine a legal funding firm is taking a risk by providing a non-recourse cash advance on a settlement, they want to be sure about its chances of success otherwise it may end up losing money. When your lawsuit loan application is evaluated, your case’s viability will be checked. If there are problems with liability, evidence, or your injuries then your lawsuit loan application will be denied.
There Are Problems With Your State’s Laws on Lawsuit Loans
Lawsuit loans are a widely accepted practice in many states and in many cases this is not an issue. However, each state will have different laws regarding legal funding which can influence your ability to get a lawsuit loan.
Always make sure to check whether or not a legal funding firm offers lawsuit loans specifically to your state. Certain state laws may make legal funding more difficult and legal funding firms may choose to not offer lawsuit loans there. Anylawsuits offers lawsuit loans in all states except for KY, MN, AR, and MD.
Your Lawsuit Loan Can Be Denied if Your Case is Too New
A settlement loan application might be denied if your lawsuit has not progressed far enough to provide the necessary documentation and information. Some people might jump the gun in applying for lawsuit loans by applying right after an accident. Legal funding companies need sufficient information to determine the viability of a lawsuit.
So information on injuries, police reports, investigation documents, etc. need to exist so that they can make a decision otherwise you might have your lawsuit loan application denied.
What Can I Do If My Lawsuit Loan Application is Denied?
Don’t worry if your lawsuit loan application has been denied. A lot of problems with your application can still be solved with certain steps like hiring a lawyer or waiting for necessary documentation. If there is a problem with the viability of your case, your lawyer may still be working, and waiting for their results can help resolve the issue and prove your case holds water.
Choose Anylawsuits for Your Lawsuit Loan
If you are in the midst of a civil lawsuit and are having difficulty contending with immediate expenses like medical bills, car repair, rent, etc. while waiting for a settlement then consider applying for a lawsuit loan with Anylawsuits.
You do not need to provide a credit score for evaluation and you do not pay monthly installments after your cash advance. The money you owe is taken out of your settlement when it is ready and if you do not get a settlement or win your case then you are not obligated to pay back the cash advance. Fill out an application form now to begin the process and find out if you are eligible to receive a cash advance on our settlement in as soon as a day or less.