In traditional financing, lenders evaluate the financial credentials of borrowers to assess the risks involved in lending money to them and their reliability. The credit score is an important factor for ascertaining the reliability of borrowers, and persons with low credit scores find it difficult to get loans. Even if they get loans, the interest is much higher and the terms more stringent as lenders use these for covering the high risk of lending. Moreover, taking loans is often a strategy for people who want to improve their credit score and not always meet their financial needs only.
While it is not difficult to file a claim for personal injury, going through the process and sustaining the momentum can be difficult because the process can take many months, during which the legal expenses keep mounting. No plaintiff usually stays prepared financially to meet the added costs over and above the living and household expenses besides paying other bills. As a result, the financial burden can be too much to withstand in the long run.
To mitigate the economic hardships of litigants and plaintiffs, many financial companies specialize in offering settlement funding in the form of advance against the expected compensation. The funds help sustain the legal process and reorganize personal finances and manage it better. When litigants receive stable funding, they can continue with the case for long and obtain the compensation they deserve.
The business of providing financial support to litigants to help them continue with the case for a longer time is different from the traditional financing options of loans and debts. Known as legal funding or settlement funding, it is not a loan but an advance. The company provides financial assistance to litigants throughout the legal process and receives back the advance only after the case settlement. Companies involved in post-settlement funding business focus on the case’s merit and assess the chances of the plaintiff winning the case and getting the proper compensation. Since the focus is on the legal aspect, the financial standing or credentials of the individuals do not matter at all.
Settlement funding is a type of borrowing but is completely stress-free because it does not involve any payback soon after disbursement. Unlike loans that borrowers must start paying back soon after receiving the funds, there is no immediate payback involved in settlement funding. The company that offers the funds waits till the final settlement, no matter how long it might take the claimant to receive the funds, after which they must pay back the amount borrowed to the company.
Funding is available during the pre-settlement as well as the post settlement stages of the case. Even after winning your case, it takes a long time for the money to reach your account after complying with the distribution protocols that follow the court order approval.
The wait becomes much more bearable as you need not rush to pay back the lender until you receive the money.
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