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January 2017

Hypothetical Lawsuit Loan Examples

If you're researching lawsuit loans and wondering how they work a hypothetical example may help you understand the process.  

Case 1: Motor Vehicle Accident

A plaintiff was rear ended in a car accident where they suffered bulging and herniated discs of the neck from whiplash.  The plaintiff will be out of work for a few months.  The plaintiff’s rent and car payment is due at the end of the month.  They have exhausted all their savings and due to poor credit are unable to borrow money from a bank.  The lawyer thinks the client’s case is worth $50,000, but the insurance company has only offered $10,000.  Because of the state court’s heavy caseload, the lawyer informs their client that the case will take approximately 12 months to settle.

Option A. The client decides to take the $10,000 offer in opposition to their attorney’s advice.  After the attorney takes a third of the settlement in fees and the medical providers take another $2,000, the client is left with $4,700.

Lawsuit Loans – Not Actually Loans

If you’ve been injured in an accident and need cash to cover expenses you may be searching for a lawsuit loan.  While a lawsuit loan is the most common search term for plaintiffs looking to borrow money against their case, it is not actually a loan. 

You may be wondering if you borrow money and have to pay it back, how is it not a loan?  Well, in the event that you lose your case, you won’t have to pay back the money you borrowed. 

First and foremost it’s important to note that while the term “lawsuit loans” is commonly used to search for pre-settlement and post-settlement funding, they are not actually loans. 

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