People sometimes don’t understand a lot of things. They think: I want to sue my bank so I can get some money! But is it that easy to do that? Is that one of many myths that dealing with the law is easy? Yes it is – and I recently had a discussion with a friend about settlement loans.
Many myths surround the settlement loans that lawsuits can obtain. If you are a plaintiff today and are sitting around not knowing these facts about the real truth in settlement loans, then maybe you are just being an ostrich with your head buried in the sand! It`s time to learn the facts as they are today.
The facts and the fiction
Settlement loans theory is shrouded in misconceptions. Here I intend to hand out the facts separately from the fiction. In the US courts of the civil system order, it is possible to get every year, loans on the loan settlements expected in the future. However, as people are getting aware of this fact they do weave some fiction around it. So, when you have a lawsuit that is pending in a civil court in the US.
The fiction is that I is dead easy to get these loans. Not true as it is a difficulty today to get a loan based on the outcome of a future lawsuit settlement.
Contrary to the popular belief, it is not easy to get a loan of this sort approved since when it is a situation of providing a loan to the plaintiff against his pending lawsuit, the loan provider can be sure of a return of the amount only if the settlement speaks `win` of the case. If the plaintiff loses, the lender will have to bear a loss until the money is returned by the plaintiff.
Therefore, on a precautionary note, the lender needs to research all the facts about the case and then decide if or not to make the loan to the plaintiff. Only after reviewing all the documents as well as the case evidences, and a discussion with the plaintiff`s attorney will the lender decide. If they suspect that the lawsuit is frivolous, they will simply deny any loans.
Many people commonly believe that a loan against lawsuit settlements is going to make your case look weak. This is a misconception. Most of the times there is a strict privacy law enforceable and the defendant need never be aware of the fact of your having taken a settlement loan. Then it is quite impossible for him to point out that as the plaintiff has sought a loan it is obvious that he is looking for money only from the case.
You might have to pay high rates of interest on the loans against settlement of lawsuits because these are based on the outcome of the lawsuit.
A favorable verdict will be favorable consequence as the plaintiff will receive a settlement amount and then be able to repay the loan. However, what happens if there is a negative verdict to the case and i want to sue my bank. The plaintiff has to make other arrangements, which means that he will make the lender wait and probably miss on payments, both of which are expensive processes for the lender. Since the probability of receiving the money is the crux of the matter, the loan rates of interests are high.
Often people think that losing a case ruins the credibility of the losing party. Credit history, history of employment or your level of income does not put you at lower levels of credibility. However, this is untrue as in the event of winning the lawsuit you need to pay back the amount you borrowed. However, if you are at the losing end there is no commitment involved to repay the attorney any amount. So, when you win a case, you pay back the lender the amount along with interest and fees. If not, the amount is paid off to the lender directly and does not even come into the hands of the plaintiff.