As many plaintiffs know, it can sometimes be difficult to finance lawsuit expenses. The good news for you is that if you are in the middle of a pending civil lawsuit, you have many options to finance your lawsuit expenses.
Before I tell you how you can easily finance your lawsuit, let’s go over some of the expenses you may incur during a lawsuit:
- Your lawyer. If your lawyer does not agree to work on contingency (this could be due to the fact that he doesn’t fully believe in your case), you will need to pay the lawyer as the case progresses. This will require you to pay your lawyer with your own money.
- Costs of handling legal cycles. There are packages that must be sent back and forth from interested parties. There are faxes, Fed-Exes, etc. These can add up with your average court document is over 50 pages long.
- Costs of research and investigation. Many times, you will need to pay to have a private investigator research your case. This can sometimes cost you thousands of dollars on it own.
Add all of this to the fact that a civil action lawsuit often implies the fact that the plaintiff is in some sort of financial trouble (due an auto accident which puts the person out of work or a commercial lawsuit because of some financial damages), the situation can get precarious.
If you find yourself in the situation where you have a civil lawsuit and you need a way to finance your lawsuit expenses, there is something you can do about it. summons and complaint
- You can borrow money from a friend or family member. While this may a workable solution for you, remember that if you lose your case and don’t get a settlement you will no owe money to a friend or family member.
- You can put the expenses on a credit card. Putting legal expenses on a credit card is not a wise decision unless you and your lawyer are very positive that you will win the lawsuit. Of course, no matter how confident you are that you will win your case, it is nearly impossible to know you will win. Surprises happen all the time and they aren’t always in your favor. Imagine being stuck with tens of thousands of dollars of credit card debt.
- You could pull money out of a mortgage on your house, but this is even more dangerous than putting the expenses on a credit card. Imagine losing your lawsuit and now you owe money against your house. You’ve now lost some equity in your largest possession. With credit card debt, at least the loan was unsecured!
- The final option is a lawsuit loan, which is the most standard way to finance a lawsuit or pay your bills while you spend your time working on your lawsuit. A lawsuit loan is a non-recourse loan, which means that if you lose your lawsuit, you won’t owe anything. This makes it one of the safest ways to fund your lawsuit.
Of course, it’s true that a lawsuit loan will have a higher interest rate than the money you could get from a credit card or mortgage, but you must realize these things about a lawsuit loan:
- Completely unsecured
- Completely non-recourse (so if you lose you owe nothing!)
- There is no reporting to credit bureaus
So, yes, the interest rate is high (anywhere from 30% to 50% per year), but this is because lawsuit loans aren’t technically loans. They are INVESTMENTS.
When we give you money, we are actually investing in your lawsuit. It is technically a business investment. And, like any business an investor invests in, he wants to see returns of 15% to 50%. Since many cases fail, we have to bump this up a bit.