Accidents can be very frustrating. They not only leave you physically hurt but emotionally too. At such moments, you cannot even think straight. Money becomes the major problem especially if you sustain physical injuries that hinder you from doing your typical day to day activities.
Settling bills becomes a nightmare, and you wish, just wish you can erase the moment you got into that fatal accident. Unfortunately, you cannot undo what is already done. You have to face reality and look for ways to get back on your feet.
One of those ways is filing for a personal injury claim and let whoever harmed you pay you for the damages. However, although this path is always the best, you cannot get the compensation right away. You need to wait until the insurance company agrees to grant you what you deserve. Expenses will always be there, and you cannot wait until you get compensated. Fortunately, you can file for settlement loans to push you through the period.
But which one is the best; legal funding or lawsuit loans? Most individuals do not understand the differences between the two and this article aims at helping you understand how the two types of funding work.
Legal funding is not a loan as compared to lawsuit loans
With legal funding, companies charge a specific amount of fee on their investment. However, the funds are only repayable if the client’s lawsuit is successful. In cases where the lawsuit is not successful, the client does not have to pay a single cent to the funder. The contrary, however, is valid for lawsuits loans. Once you request for a loan to meet your financial needs, you are required to pay it back whether or not your lawsuit is successful. Filing for a lawsuit loan can get you in a worse financial position than you were before the process started if it is not successful. It is advisable to settle loans before things get out of hand.
Legal financing provides an additional funding option while a lawsuit loan is more of a liability
In short, legal funding in California is superior to other alternatives as it offers tremendous financial support to clients without pressuring them to agree on many terms. Legal financing buys the plaintiffs adequate time so that they don’t rush to make regrettable decisions. This way, clients can take time in considering their options throughout the legal process. However, with a lawsuit loan, you are indebted to the lending company, and you don’t have many options. The company is usually keen to see what your chances of winning the case are before they can provide you with the loan.
Legal funding is highly regulated as opposed to lawsuit loans
In legal financing, the best practices are imposed with the aim of protecting the plaintiff’s best interests. The American Legal Finance Association (ALFA) has worked tirelessly in imposing regulatory practices in the legal funding industry to make sure plaintiffs are not taken advantage of by funding companies. Regarding regulations, the battle for legal funding vs. lawsuit loans is won before it starts. It is because lawsuit loans have only been around for a shorter period and the government has not yet imposed regulatory measures.
In most cases, lawsuits are very stressing and demanding. They require a lot of attention as well as capital. When faced with having to choose between legal funding or lawsuit loans, then make the right decision. Your satisfaction is very crucial above everything else.