Many personal injury victims find it hard to resume their daily activities. They may also face financial constraints until their case is settled in court. If this happens, many personal injury attorneys assist their clients in getting lawsuit loans. These are provided by settlement funding companies. Of course, if you end up seeking help from the wrong company, your client’s troubles will only increase and potentially leave them unhappy with their settlement check.

Let’s take a look at some facts about settlement funding companies and how you can help your client pick the right one.

Examine the Cost Structure

The first thing you need to determine is how much a lawsuit cash advance will cost your client. Take a look at the type of interests and the annual percentage rate before your client signs the dotted line. Unfortunately, as you know – some clients may be uninformed or uneducated on calculating interest. You will also have to calculate the estimated amount of time it will take for the case to be settled. This will help you determine the approximate cost of the lawsuit loan to the client. You can compare this cost with the settlement you expect to receive and advise your client accordingly. If you feel that the cost outweighs the benefits, you can see if the client has any other options.

Obviously, as most lawyers know – there are ethics issues if you lend directly to your clients.

Besides checking for the interest rate you can also screen potential companies for other advance services, if you are really worried for your client. The majority of the cost is typically interest, however; some companies creatively pile on fees. It is preferable your client works with a company that does not charge an application fee unless the interest is extremely low (or a small doc fee).

Look for Flexibility – Competitive Rates

Some settlement funding companies have a rigid policy structure. These can be difficult to work with. They may also provide your client with an excessive amount of funding that can create problems in the future. Make sure you avoid such lawsuit loan sharks. They will not work in the best interests of your clients and will try to maximize their profits. Interest rates vary drastically, and several website’s online are acting as middle men ultimately increasing the rate for the client. There are many lawsuit loan companies, such as Mayfield that will offer smaller personal injury lawsuit advances up front and the client can get additional advances at little extra cost. They also fund in house, and do enough in business they can keep their rates fair.

Get All the Necessary Details – Some Companies Aren’t Fair

The client must choose a settlement funding company that is willing to provide them with all the details of their funding process. For instance, some settlement funding companies will not share important information about the lawsuit cash advance. This can be a problem if the repayment timetable ends up being too unreasonable. Your client should never go with a company that has a time table in the first place, because this is likely a legal issue for that company. For example, if your client is required to pay off a significant portion of the loan within 6 months of settlement, then this may throw their financial plans in disarray. Getting clarity about such aspects of lawsuit loans can help your client in the future.

Let’s Sum It Up

As a personal injury attorney, you need to make sure that your client gets financial help from the right settlement funding company. You must choose a company that is transparent and flexible about their lawsuit loan structures. Make sure to evaluate the cost of the lawsuit cash advance. You must also advise your client against borrowing more money than they need.

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