Legal financing, mostly known as litigation Financing can be known in some areas as lawsuit financing. It is a mechanism through which law firms or even individuals finance their legal costs by the help 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 financing firm gets a proportion of the shares only if the court judgement is won but the funding must happen if it is 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 be direct plaintiff financing in which you’re given the money to run the day to day legal expenses or legal cost financing at which in settling the lawsuit expenses, a check is delivered to your lawyer from time to time.
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Involve your lawyer.
Your lawyer is a major determinant in your process of acquiring legal financing because he needs to answer a few questions about the case and filling of some paperwork hence the need to let him know the facts and your intention to acquire funding.
Look out for lawsuit funding companies.
Find out about litigation financing companies and the various Types of Injuries for which they offer funding and their field of coverage.
Research on the companies you’ve chosen.
When you have finally decided on the company to source funds from, research On the company to learn whether it is qualified and pay attention on the complains. You could also visit their offices to find out its physical location.
Assessing the strength 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 profits from winning the court verdict that Will go into the payment of the attorney and the authorized funding company incorporating the attention, consider if it’s worth it. If there are other cheaper alternatives like sourcing your capital from family and Buddies then settle for that.
Enquire all demands and what It implies to get the money.
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 provide and if they attract additional charges.
One can now confidently use 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.