Can Your Lawyer Lend You Money for a Lawsuit?

If you retain an attorney to represent your personal injury claim, the attorney will work on a contingency basis. This means you pay no upfront costs for legal fees, paying instead when your settlement or award arrives.

While your lawyer will not provide funds for you in the form of a loan, they may be able to help in other ways.

Can you Borrow Money from Your Lawyer?

Per the American Bar Association lawyers are prohibited from loaning money to clients. That said, your attorney is permitted to advance funds for deposition expenses, court fees, and other related costs in line with the contingency agreement.

You are not typically required to pay the lawyer unless you win a verdict or settlement. You may, though, still be held liable for court fees or other expenses related to your attorney’s billable hours.

One of the ethical dilemmas concerning borrowing money from an attorney is that loans to clients can become a conflict of interest for the lawyer. If you and your lawyer disagree about a potential settlement, for instance, this could impact repayment of the loan. So, the more distance clients and attorneys can put between monetary disputes, the better.

What this means, though, is that many victims in personal injury lawsuits find themselves under financial duress while waiting for a case to settle. Since this could take many months, what other options exist for funding when you need it most?

How to Get Money Now on The Strength of a Lawsuit

If you are involved in a personal injury claim after an accident, two things likely happen:

1. You need time off work because of your injuries.

2. Bills start mounting for medical treatment, medications, and therapy.

Many plaintiffs find expenses piling up and income dropping while a settlement may take some time to resolve.

Pre-settlement funding, also known as a lawsuit loan, legal funding, or lawsuit cash advance is one possible solution. This is a non-recourse financial product, meaning there is no risk for the plaintiff obtaining funds.

Lawsuit loans are not traditional loans. Neither your credit score nor income are qualifying factors, and you will make no monthly payments.

Legal funding comes in the form of a cash advance but is not a traditional cash advance either. You will not need to give collateral, and you will not be responsible for repaying the cash advance unless you win your case. This will not impact your credit rating either.

With pre-settlement funding, the lending company purchases a percentage of your expected settlement – typically from 10% to a maximum of 20% of the anticipated value. If you win your case, you repay the principal in addition to an origination fee and interest. You pay the lender from your final settlement. If you do not win your case, you are not obliged to repay the cash advance.

How Much Can You Borrow with a Lawsuit Loan?

You will typically find legal funding companies offer you a cash advance of between 10% and 20% of the expected value of your settlement. As such, the higher your expected settlement, the more you could borrow.

The most sensible strategy with litigation financing, though, is to limit your borrowing to only what you need.

How Can You Use Funds from a Lawsuit Loan?

One of the key benefits of legal funding is the fact you can use the funds for any purpose.

Why Choose Uplift Legal Funding?

If you have explored other avenues of funding and you feel a lawsuit loan is right for you, here at Uplift Legal Funding we charge simple non-compounding interest. Most personal injury claims take months to settle so for many plaintiffs who take lawsuit loans with compounding interest, costs can start to spiral.

You can apply for a loan on the strength of your expected settlement online or over the phone. In the first instance, you need only supply the contact details of your legal counsel and the basic facts of your case.

We will then liaise with your attorney and promptly evaluate your case. Assuming you have a strong claim, we will send a funding contract to your attorney. Once you sign and return this agreement, you could have funds within as little as 24 hours, and you won’t need to ask your lawyer to lend you money either.

Managing Member at Uplift Legal Funding
Jared Stern is an experienced financial professional with six years of experience in the pre-settlement funding industry. After graduating from UC Berkeley with a degree in economics in 2014, Jared began his career in Morgan Stanley's mergers and acquisitions investment banking division. After working with another pre-settlement funding company for two years, Jared founded Uplift Legal Funding in 2017 to give injured plaintiffs a better choice in lawsuit loans. Check Jared out on: LinkedIn | Legal Reader | Attorney At Law Magazine
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