Legal funding is a financial arrangement where a third-party group or agency provides funds to people involved in a legal dispute. The funding is provided in exchange for a portion of the potential settlement or judgment. Some people have associated legal funding with unfavorable loans & shady financial practices, but this couldn’t be further from the truth.
Legal funding is often the best option for most people who are fighting lengthy legal battles that will affect them for the rest of their lives. Let’s take a look at the most common myths and misconceptions associated with legal funding.
Legal Funding is a Loan
The most common misconception associated with legal funding is that it is a traditional loan. In reality, it’s a non-recourse advance. This means the client only repays if they win the case. The vast majority of repayments are made from a settlement or legal win.
Legal Funding Has High-Interest Rates
Directly related to the misconception that legal funding is a loan, many people believe that legal funding comes with exorbitant interest rates. While certain fees are involved, they are not framed as interest rates, and the repayment structure varies. Any fees involved will be revealed to the client upfront–no surprises.
Recourse Nature of Funding
Legal funding is non-recourse in the vast majority of situations. This means that the individual only repays the funding if they win the case. If the case is lost, the individual is not obligated to repay the funded amount.
Legal Funding is Only for the Financially Disadvantaged
Some may think legal funding is only for those in financial distress. However, individuals, including those financially stable, may choose legal funding to manage costs during prolonged legal battles.
Funding Approval is Guaranteed
There’s a belief that approval for legal funding is guaranteed and quick. In reality, approval depends on the strength of the case, and the process involves evaluating the merits of the lawsuit.
Legal Funding Affects Legal Strategies
People may fear that legal funding agencies interfere with legal strategy. Generally, these agencies do not have a say in the client’s legal decisions.
All Cases Qualify for Legal Funding
Not every legal case qualifies for legal funding. Funding companies carefully assess cases, typically favoring those with a strong likelihood of success.
Legal Funding is Only for Plaintiffs
While legal funding is often associated with plaintiffs, defendants facing legal costs may also seek funding to defend their case. Countless people are wrongfully sued each year for things most of them are not financially capable of handling. Depending on the type of case, Legal Funding will sometimes be available to defendants who will have avenues of financial recourse for being wrongfully accused.
Legal Funding From Cash Now Funding Group
Are you or a family member in need of financial assistance due to a lengthy legal battle? Are you preparing for a long-term legal battle to get the compensation you deserve? Cash Now Funding Group can be the financial lifeline you need while your case settles. Applying is free and confidential & no credit check is required.
