When you’re involved in a lawsuit, one of the most challenging aspects can be managing the financial strain while waiting for your case to settle or reach a judgment. Medical bills, living expenses, and legal fees can quickly add up, creating significant pressure to settle early, often for much less than your case is worth.
Non-recourse legal funding offers a solution to this problem by providing the financial support you need without the risk of repayment if your case is unsuccessful. But what exactly does non-recourse legal funding mean, and how does it work? Let’s take an in-depth look at what it means for you.
What Is Non-Recourse Legal Funding?
Non-recourse legal funding is a type of financial assistance provided to plaintiffs involved in a lawsuit, allowing them to receive a cash advance before their case is settled or goes to trial. The term “non-recourse” means that the funding is not a loan and that the plaintiff is not required to repay the funds unless they win their case or reach a settlement.
In simpler terms, if your case is successful, you will repay the funding provider from your settlement or judgment. However, if you lose your case, you owe nothing, and the funding provider assumes the risk. This feature makes non-recourse legal funding a low-risk option for plaintiffs who need immediate financial assistance without the fear of being burdened with additional debt if their case does not result in a favorable outcome.
How Does Non-Recourse Legal Funding Work?
Non-recourse legal funding works by providing a cash advance to the plaintiff based on the expected outcome of their lawsuit. The amount you can receive is typically a portion of the anticipated settlement or judgment amount. Funding providers assess the strength of your case by reviewing documents, such as case details, medical records (in personal injury cases), and other relevant information, often in consultation with your attorney.
Once the funding provider evaluates your case and determines that it has a strong likelihood of success, they offer you a cash advance. This advance helps you cover living expenses, medical bills, and legal fees while your case progresses. If your case is settled or won, you repay the advance, typically with a percentage of the settlement or judgment. If you lose the case, you are not required to repay the funding, which sets non-recourse funding apart from traditional loans or credit lines.
Benefits of Non-Recourse Legal Funding
Risk-Free for Plaintiffs
One of the most significant benefits of non-recourse legal funding is that it poses no financial risk to the plaintiff. Since repayment is contingent upon the outcome of the case, you are not personally liable for the funds if your lawsuit is unsuccessful. This gives plaintiffs peace of mind, knowing they won’t face financial hardship if their case doesn’t result in a favorable verdict.
No Impact on Credit Score
Unlike traditional loans, which can impact your credit score, non-recourse legal funding does not require a credit check. Your credit score and financial history are not factors in determining your eligibility for funding. The primary criteria for approval are the strength of your case and the likelihood of a successful resolution. This means that even individuals with poor credit can still access legal funding if they have a strong case.
Avoid Rushed Settlements
Non-recourse legal funding allows plaintiffs to avoid rushed settlements. When plaintiffs face financial strain during a lawsuit, they may feel pressured to accept a quick settlement offer, often for much less than they deserve. With the financial cushion provided by legal funding, you can afford to wait for a fair settlement or go to trial without worrying about mounting bills. This gives you more time to consult with your attorney, negotiate, and make informed decisions about your case.
Maintain Control Over Your Case
Unlike other forms of financial assistance, such as traditional loans, non-recourse legal funding does not interfere with the direction of your lawsuit. You remain in control of your case, working with your attorney to decide the best course of action. The funding provider does not have a say in how you proceed with your lawsuit or settlement negotiations, ensuring that you maintain full control over your legal strategy.
How Much Can You Receive in Non-Recourse Legal Funding?
The amount of non-recourse legal funding you can receive varies depending on the specifics of your case. Factors such as the expected value of the settlement or judgment, the strength of the case, and the anticipated timeline for resolution all play a role in determining how much funding you may be eligible for. Typically, funding providers offer a portion of the anticipated recovery, which can range from a few thousand dollars to several hundred thousand dollars, depending on the complexity and potential value of the case.
It’s important to note that legal funding is not designed to cover the entire amount of your settlement or judgment but rather to provide short-term relief while your case is ongoing. The funding amount should be enough to help you manage living expenses, medical costs, and other financial obligations until your case is resolved.
Costs of Non-Recourse Legal Funding
While non-recourse legal funding is risk-free for plaintiffs, it does come with a cost. Funding providers charge a fee, which is typically a percentage of the amount advanced. The fee is generally higher than traditional loan interest rates, as it compensates the funding provider for assuming the risk of the case’s outcome. The longer your case takes to resolve, the higher the fee will likely be. However, since the repayment is contingent upon winning or settling the case, many plaintiffs find the costs acceptable in exchange for financial relief during a difficult legal process.
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.
