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Lawsuit Funding: FAQ |
Written by Alec Schibanoff
Thursday, 10 May 2007
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LawMax has a 24-hour customer inquiry system: 24 hours a day, 7 days a week, clients and potential clients can call 877-788-CASH or visit the LawMax website to ask questions. All questions are answered promptly, but to save even more time, here are answers to the most commonly asked questions.
1) Will I qualify?/How do I qualify?
Each request for lawsuit funding is evaluated on a case-by-case basis. LawMax gets all the pertinent information about a case from the plaintiff’s attorney. After reviewing the documentation, a LawMax underwriter reviews the funding request. If the underwriter decides it is a claim in which LawMax can invest, the customer service department contacts takes over and sends a Claim Investment Agreement to the client’s attorney so the client can have it reviewed before signing it. Clients can apply online or over the phone, and the applicant is under no obligation until he or she accepts the lawsuit advance offer and signs the Claim Investment Agreement.
2) What will my advance cost?/ What will the interest be?
“Interest” is what banks and other financial institutions charge for loans and other forms of credit. Since LawMax does not offer traditional loans, the company does not charge interest. Lawsuit funding from LawMax has a “risk premium” assigned to it that is a multiple of the advance, not an annual interest rate or APR. The exact amount of the risk premium varies and depends on a number of factors. A risk premium is assigned for each advance based on the amount being funded, the risk of losing the case, and the time the case is expected to take to be resolved. These variables are determined by the LawMax underwriters when they evaluate the client’s request for funding. In most cases, the risk premium or the amount the client will have to repay on lawsuit loans from LawMax will be more expensive than a traditional bank loan because the funding is non-recourse. That means the advance only has to be paid if and when the plaintiff wins the case or reaches an out of court settlement.
3) How is my advance repaid?/When will I have to pay back my advance?
Lawsuit funding is a non-recourse form of financing, so plaintiffs only have to repay advances if and when they win their case or settle out of court. To understand how repayment takes place, it is important to understand that there are four possible outcomes for every case: A case may be won at trial, a case may be settled out of court, a case may be lost at trial, or the attorney and plaintiff may decide to abandon a case. If a case is abandoned or is lost at trial, the plaintiff owes nothing so there is nothing to repay. If, however, the case is won or an out-of-court settlement is reached, the attorney will distribute the proceeds of the settlement from the law firm’s disbursement account. The funds from the settlement are sent to the attorney and deposited in the law firm’s trust account. The law firm first pays itself the fees and expenses it is due. All lien holders are then paid, and LawMax is a lien holder against a lawsuit for which it provides an advance. LawMax actually invests in the client’s portion of the lawsuit, but never advances so much that the investment affects the outcome of the case. Therefore, LawMax is actually repaid by the attorney, so the plaintiff needs to do nothing regarding repayment of the advance he or she received. Once the attorney and lien holders have been paid, the remaining funds are paid to the plaintiff. Article Source: http://www.ArticleBlast.com |
About The Author:
Alec is a well known author and has been writing content for Lawsuit Advancesas a Loan service to fight your legal case for so many years. His content is worth reading as it gives you an insight about different aspects of availing this service. For more information visit "www.fundmycase.com"
Alec is a well known author and has been writing content for Lawsuit Advancesas a Loan service to fight your legal case for so many years. His content is worth reading as it gives you an insight about different aspects of availing this service. For more information visit "www.fundmycase.com"
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