Here’s the scenario: you’ve been injured in an accident and you had to stop working because of your injury. You expected your case to be settled in six months, but it’s taken 18 months and there’s still no end in sight. You can’t afford to pay your rent much longer. What do you do?
For many, the answer is get money as quick as possible no matter what the cost. This is a dangerous way to think, even if time is running out for your bank account. Just like you wouldn’t buy a car without knowing exactly what you were getting into, looking to get financial help on your lawsuit is also something that should take your time on. Even though there is immediacy, here are a few steps you can take before signing an expensive funding contract.
Borrow money from a friend or relative
Let’s be honest: all companies go into business to make money. Some may want to help people in the process, but if business don’t ever make money, they close their doors. Your friends and relatives aren’t looking at your need for help as a way to profit. Some may lend you money “for free” (with no extra money requested when you pay them back). Others may have been burned by lending to friends before, so they may charge a very small fee on top. Borrowing in this fashion is the clear way to go if it’s available. No company will be able to match Grandma’s payback amount.
However, for some plaintiffs this isn’t a viable option and they need to consider a legal funding company. Don’t necessary pick the first one and go with them.
Be Treated Like a Person, Not a Dollar Sign
I wish I could say otherwise, but there are some unscrupulous people in this industry. Some companies see plaintiffs as cash cows. You want a company that will return your calls, that will take the time to explain everything thoroughly to you. You want someone who will give you updates daily on the status of your application. Anything less and you are selling yourself short. Some companies can get pretty good rates for you, but that alone isn’t enough. Look for one who will treat you right and get you a good rate.
If the company you’re calling is pressuring you with obnoxious sales tactics or ignoring you, they’re probably not the right company. You want an ally to help you, not a checkered-suit-wearing car salesman.
Find Out the Rates
Like the last tip, some companies won’t be willing to disclose this up front, not even a ballpark figure. The specific rates CAN vary depending on case details, which won’t be known up front, but if the company can’t even give you a range of rates and fees, it’s probably best to move on. The best companies can you give you a quote for how much will be owed back if you pay back in a certain timeframe. Be comfortable with the rates before you sign the contract.
Actually Read the Contract
This may seem silly to put in print, but many clients are so starved for money that they’ll sign the contract no matter what. This is dangerous. You don’t have to understand every single bit of legal jargon, but you need to know the details of your funding. In several states, funding companies have reached agreements with state Attorney Generals which specifically outline what information needs to appear in a contract. This includes easy-to-understand charts with how much money will be repaid. Any contract that does not include these charts or doesn’t include the funding rate should not be signed. Any company that is not willing to go through the contract terms with you before signing is also probably not right.
Put in the Time and Consider Your Options
There are alternatives to taking the first, highest-price solution to your financial problem. Looking local (friends and family) is the best, but if you do need to go to a company for help, make sure you are picking the right one. Don’t be bullied into taking the first available rate, especially if you feel it isn’t great. What might be expensive for one company to fund (let’s say it’s a case that is not in their normal funding wheelhouse) might be much cheaper for another company to do. Finally, make sure you are kept in the loop at all times. Any company that you don’t hear from for even a couple of days isn’t worth wasting your time on.