Legal financing, mostly known as litigation Financing can be known in some areas as lawsuit financing. It’s a mechanism whereby law firms or even individuals fund their legal costs by the assistance of a third party company. It is likely to be used by plaintiffs and its advantage to the funded party is that it doesn’t have to pay back the amount if they lose the case. The funding firm receives a proportion of the shares only if the court verdict is won but the funding has to occur if it’s worth the risk.
Outlined below are steps which are followed when trying to acquire litigation financing.
Decide on the type of funding you need.
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There are two kinds of funding in legal financing and you have to know which one you’re settling for and its implications. It can either be direct plaintiff financing whereby you’re given the cash to run the day to day legal expenses or legal cost financing whereby in settling the lawsuit costs, a check is sent to your attorney from time to time.
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Involve your lawyer.
Your attorney Is an Important determinant in your process of obtaining legal Financing since he needs to answer a few questions about the situation and filing of some paperwork thus The need to let him know the facts along with your intention to get financing.
Look out for lawsuit funding companies.
Find out about lawsuit financing companies and the various Types of Injuries for which they offer financing and their area of coverage.
Research on the companies you have chosen.
When you have finally decided on the company to source funds from, research on the company to find out whether it is eligible and pay attention on the complains. You might also visit their offices to discover its physical site.
Analyzing the potency of your case.
Consult your attorney to find out if your situation is strong enough to obtain Funding and how essential it is.
Considering the proceeds from winning the court judgement that Will go in the payment of the attorney and the legal financing company incorporating the interest, consider if it is worth it. If there are other more economical options like sourcing your capital from household and Friends then settle for that.
Enquire all requirements and what it implies to get the funds.
This can be done best by asking questions in the firm itself like The percent they are willing to fund, the interest rate they will charge you around the funds they give you as well as any hidden fees. Find out about any additional services they offer and if they attract additional charges.
One can now confidently apply for the authorized financing providing the necessary information through the right channels.
Read the contact thoroughly and understand before signing. Should you agree With everything inside, you can the append your signature.
Depending On the station of receiving money, check out if you have gotten the amount.