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September 2016

Sell Your Structured Settlement | Structured Settlement Loans

There are two types of people who receive structured settlements

  1. Those being compensated from personal injury lawsuits
  2. Lottery winners

Structured settlements are designed to replace the income lost due to an injury to the plaintiff (and help the insurance company paying their settlement stay solvent) and so a lottery winner doesn’t squander their wealth.  While they have good intentions, there may come a time where the recipient needs a lump sum instead of periodic payments.  Recipients can sell their payments to a third party for a lump sum.  The amount they receive varies from company to company so it’s important to shop around.  You can sell a portion of your structured settlement rather than the entire thing.  For example you could keep 40% of the payments and give 60% of the payments to a third party in exchange for x amount of dollars.  Beware of offers that sound too good to be true or that can be completed in just 24 hours.  Structured settlements are complicated and take time. 

Litigation Finance Compared to Other Subprime Lending

Litigation finance has many similarities with other forms of subprime lending, but it’s important to note the differences.  Historically, subprime borrowers were defined as having a FICO scores below 640, but this figure has changed over time.  These loans are characterized by higher rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk.
Litigation finance can carry higher rates compared with alternative forms of borrowing.  However, borrowers who seek out litigation finance often have no or low credit scores.  The collateral is their lawsuit and the outcome is unpredictable.  Litigation finance is unique in that it provides liquidity to an illiquid asset.  The money can be advanced in as little as 24-48 hours from the time of application, but usually no sooner than 90 days after the accident occurred.  Because the money advanced is based upon the case, a credit check is irrelevant.  As long as the facts of the case are known, the litigation finance company can offer a dollar amount relatively quick.  However, it is difficult to estimate the value of a case if the accident has just happened and the client is still treating.  Usually you won’t be able to borrow until 90 days after your accident depending upon how serious your injuries are. 

Does Pre-settlement Funding Promote Frivolous Lawsuits?

We all remember that scene from the movie Liar Liar where the Fletcher’s Secretary Greta, describes a frivolous lawsuit as she's quitting.  “Mr. Reede, several years ago my friend had a burglar on her roof, a burglar, he fell through the kitchen skylight, landed on a cutting board, on a butcher’s knife, cutting his leg.  The burglar sued my friend, he sued my friend and because of guys like you, he won.  My friend had to pay the burglar $6,000.  Is that justice?”  Fletcher, incapable of telling a lie responds, “No, I’d a got him ten.” 

Is Lawsuit Settlement Funding Usurious?

Usury was once defined as the interest paid for the use of money.  Various religions considered charging any interest on borrowed money usury.  In present times we know usury to be an exorbitant amount of interest, charged above the legal rate.  Many states have their own laws and specific rates.  Most state laws share the following components of usury detailed in the Ives
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