Settlement Loans And Lawsuit Loans: Pros, Cons, And Potential Pitfalls
In the past, the terms settlement loans and lawsuit loans meant loans against a court ordered settlement you have won in a law suit
. Such things were paid out to you over a period of time usually in monthly payments, but you had the right to convey your interest in them by selling them for a more guaranteed lump sum.
To borrow against them you had to prove monthly income. Many of these cases involved injuries that precluded the plaintiff from being able to resume employment. In such instances, prior to the evolution of litigation funding, the only other option you had was to sell it to some investor who gave you less than it was worth, but you got a chunk of money right then, instead of having to wait.
Although this may not be preferable, but the fact is that many of those against whom judgments are ordered would be classified as "judgment-proof." If you need the money for major health problems, you may have to liquidate assets to pay doctors' and hospitals' bills. Lawsuit Loans and settlement loans often keep plaintiffs from having to liquidate their assets merely to satisfy outstanding indebtedness.
Now, the more recent usage of the term settlement loan and lawsuit loan often brings about situations in which those who are over extended (e.g., your paycheck does not meet the expenses coming due check and you have fallen behind on your payments to one or more creditors who now want to 'settle' the debt by taking away your home, car, etc.) The inability to obtain settlement funding they often prove disastrous!
In most instances, if you elect to restructure your finances, you will have to be able to verify your monthly income, usually with recent IRS tax records. Sometimes the financial company will negotiate with you for a lesser amount of total debt by waiving a portion of the accrued interest that accumulated over the period of time you fell behind on making your payments. Fortunately, this occurs neither with settlement loans in order lawsuit loans (i.e., there is no credit check required to obtain this form of litigation funding).
Most often these creditors will not agree to any extension or restructuring, they want to settle it and get it off their books by agreeing to a smaller total amount of money to pay off the high balance you ran up. The down side of this is that if you do not have the money to make your smaller monthly payments, where are you going to get a large sum of money to pay this completely off?
However, it is important to realize that those individuals who do seek a lawsuit loan must be prudent in the manner in which the situation is approach. For instance, it is possible to have an attorney ask that the court assign all obligations to repay settlement loans and lawsuit loans to the defendant, assuming the defendant loses in the underlying litigation. Furthermore, it is always advisable to set up a good household budget and stay within it - this is the best way to avoid ending up in any quandary over some form of settlement. Instead of using your credit cards to live on, postpone spending money on superficial items and start putting the same amount of money into an interest bearing account at your bank. You can even consider putting the extra money into your IRA, or other type of retirement fund which will benefit you in your golden years by helping the future payments of that account keep up with the cost of living at that point in time.
by: Dr. Tom Rhudy
Think of a workout commercial loan if you want to avoid a foreclosed commercial loan Strategies And Best Practices Of U S Community Banks --- Aarkstore Enterprise The Simple Rules On An Fha Loan Money in the Bank Scholarships For mothers - College Scholarships Or a Student Loan? Contolling Subprime Mortgage Loans Achieving An Fha Loan College Loans For Single Mothers Should I Got Variable Or Fixed Rate Mortgage? University student loan consolidation which is Their Practical Specifics How Do You Create a Call Center Solution Without Breaking The Bank? All You Need To Know About Title Loans Find Remodel Loan And Capital