Global statistics show that between 20 and 50 million people suffer non-fatal injuries due to car accidents annually.
Those who’ve suffered opt for settlements either outside or inside the courtroom. No matter what type of settlement one opts for, the results can take a lot of time (sometimes up to years). Such delays can bring a lot of financial pressure which can worsen your state after a mishap.
Knowing what to do in case of emergencies is an important part of financial planning. So, we have put together this detailed guide about car accident lawsuit funding.
Is Car Accident Lawsuit Funding The Same as Car Accident Settlement Loan?
The terms “car accident settlement loans” and “car accident lawsuit loans” are often used interchangeably. But the two are quite different from each other.
Settlement loans are based on factors like your credit score and employment status. These are widely preferred over lawsuit funding (or loan) mainly because people aren’t aware of the latter.
Sometimes, lawsuit funding is also called a lawsuit loan. Make sure you read the terms clearly to understand whether they’re referring to funding or a loan.
Which Is A Better Choice?
Even if you are eligible for a settlement loan, you will have to pay a hefty fee and pray that the resolution ends in your favor (without which your loan is not sanctioned).
Car accident lawsuit funding, on the other hand, is an advance amount you receive without any hidden fee. The process is super quick and hassle-free. You will have to pay the funding back only if you win the case in court.
These basic differences are enough to tell why a car accident victim is better off choosing a lawsuit funding over a settlement loan.
What To Expect From A Car Accident Lawsuit Funding
As stated earlier, since lawsuit funding is also called a lawsuit loan, it can be a little confusing. Here’s what you should check for.
- Unlike settlement loans, lawsuit loans aren’t dependent on your credit score. You don’t have to worry about how the interest rates might vary due to your credit score.
- Your assets aren’t evaluated. A lawsuit loan doesn’t consider your asset value.
- Your employment status doesn’t matter to lawsuit funding. Never held a job? You’re still eligible if you’re an accident victim.
- Your future settlement is the only collateral for the lawsuit funding you receive. You win the settlement, you repay the loan from it. If you lose, you don’t have to pay the loan with your own money. That is, the funding is structured as a non-recourse loan.
- The funding company will not interfere in the case in any way. They only wait for the settlement amount to be as large as possible.
- The processing for traditional loans takes at least a week (or more!). But for lawsuit funding, the waiting period is shorter. For example, a car wreck loan from TribecaLawsuitLoans.com may get approved as fast as 24 hours.
- You can use the lawsuit loan for any expense. There are no restrictions. Following an accident, victims go through a tough time and overdue bills only add to the stress. On receiving your lawsuit funding, you can clear any of your bills even if they are unrelated to your accident.
What Not To Expect From A Car Accident Lawsuit Funding
Don’t expect lawsuit funding to be cheap. Although there are no upfront costs, when you win the settlement, you will have to pay the principal along with the interest. This interest may be equal to or more than the principal.
This may not be considered a huge problem because the provider doesn’t burden you with monthly installments. Also, the amount you repay will never exceed the settlement amount.
What Type Of Car Accidents Qualify For Lawsuit Funding?
Lawsuit funding covers almost all types of car accidents. The following are the most common types.
- Hit & Run Accidents: When another vehicle hits you and its driver flees the scene without helping you or informing the police, it is called a hit-and-run accident.
- Single Car Accidents: As the name suggests, this type of accident involves only one car. Examples include a car hitting a tree or a car speeding off into the stop sign due to a brake malfunction. Not all single-car accidents are the driver’s fault. Claims can be brought against the vehicle manufacturer or even the government, provided you are equipped with the evidence.
- T-Bone Accidents: This is a common name for side-impact collisions in which a car strikes another car on the side forming a T shape. Eyewitness and traffic recordings are considered important evidence in the settlement of such accidents.
- Head-on Collisions: Here, two vehicles collide directly into each other, often resulting in a fatality. If not fatal, the injuries can be very serious ranging from spinal cord injuries to broken bones.
Applying For A Car Accident Lawsuit Funding
The application process for car accident lawsuit funding is simpler than that of traditional loans.
But before applying, the following criteria must be met:
- You must be a victim of a car accident.
- You must have a pending legal claim or settlement.
- You must be represented by a personal injury attorney.
Several companies now offer paperless lawsuit funding. You can visit the fund provider’s website and apply online by filling in your case details.
After reviewing your details, they’ll get back to you and discuss the case with your attorney. As the last step, they will send you a contract (it is recommended to make your attorney go through the contract). You will receive the lawsuit loan shortly thereafter.
Car Accident Lawsuit Funding And Settlement
Besides helping the victim pay for medical expenses and other bills, lawsuit funding can also help obtain a larger settlement.
Some victims may be unable to work after a serious car accident. Without a cash advance like lawsuit funding, their bills are sure to pile up. Often, the opponent’s attorney may take it as an advantage and make a settlement offer with a meager amount. The victim, when desperate to clear his bills, may agree to such an unfair (and small) settlement.
But with a car accident lawsuit loan, the victim can clear his bills and patiently wait to let his attorney fight until the settlement amount is fair.
We understand that after a car accident, you might have to make many difficult decisions. In such difficult times, car accident lawsuit funding can be your silver lining. We hope this guide answered some of your questions regarding car accident lawsuit funding. Remember, there’s no harm in hoping for the best as long as you’re prepared for the worst.