Financing For Lawsuits
In the United States, plaintiffs and defendants that lack financial resources for litigation or other legal expenses may be able to obtain legal financing. Legal financing companies can provide a cash advance to litigants in return for a share of the ultimate settlement or award. If the case ultimately loses, the litigant does not have to pay any of the money funded back. Legal financing is different from a typical bank loan. The legal financing company does not look at credit history or employment history. Litigants do not have to repay the cash advance with monthly payments, but do have to fill out an application so that the legal financing company can review the merits of the case.
Legal financing can be a practical means for litigants to obtain financing while they wait for a monetary settlement or an award in their personal injury, workers' compensation, or civil rights lawsuit. Oftentimes, plaintiffs who were injured or forced to leave their jobs still have mortgages, rent, medical expenses, or other bills to pay. Other times, litigants may simply need money to pay for the costs of litigation and attorneys' fees. For this reason, many litigants turn to reputable legal financing companies to apply for a cash advance to help pay for bills.
Defendants, civil rights organizations, public interest organizations, and government public officials can set up an account to pay for litigation costs and legal expenses. These legal defense funds can have large membership counts where the members contribute to the fund. Unlike legal financing from legal financing companies, legal defense funds provide a separate account for litigation rather than a one-time cash advancement, though both are used for purposes of financing litigation and legal costs.
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