Lawsuit funding is different from any other financial transaction because Lawsuit funding is a non-recourse form of financing. This simple detail can mean a huge financial difference to plaintiffs in lawsuits who are awaiting the outcome of their claims and find themselves in need of cash to cover lost income and pay bills. Home buyers must make mortgage payments regardless of what occurs in their lives or their homes. If the home is destroyed through fire or natural disaster, and the insurance does not cover the balance due on the mortgage, the homeowner is still responsible to repay the lender, even while facing the expenses of moving, buying a new home, or repairing or rebuilding the old structure. If a homeowner loses his or her job, he is still responsible for his monthly mortgage payments regardless of his ability to make those payments each month!

Similarly, a car owner who secures an auto loan continues to be responsible for repayment of the loan no matter what happens. One common problem that occurs is when a car owner has a car accident in the second or third year of the loan. This generally leads to a situation in which the vehicle owner is "upside down" on the loan. This means that the fair market value of the car (and that is what the insurance company will pay) is less than balance due on the loan. Repayment of the amount of the loan not covered by insurance is the responsibility of the debtor, regardless of his or her ability to pay it!

The same problems exist with credit cards. Regardless of one's ability to make monthly payments (the credit card holder is injured and cannot work, for example), the credit card issuers wants a monthly payment!

In fact, with almost every other type of financing besides lawsuit loans, the client is obliged to repay the amount received, plus compounded interest, regardless of his or her ability to make those payments. Borrowers who find themselves unable to repay their obligations face ruined credit ratings and repossession of their homes, cars and other possessions.

Lawsuit funding is unique because it is a non-recourse form of financing. With lawsuit funding, recipients of this funding only have to repay the advance if and when they either win their case in court or reach an out-of-court settlement. This means that lawsuit funding recipients only need to repay their lawsuit advances when they actually have the money with which to repay them! Lawsuit funding recipients sign a Claim Investment Agreement, which means that plaintiffs assign a stake in their lawsuits to LawMax. Additionally, the advance is paid out of the plaintiff's portion of the proceeds, so the attorney does not have to worry about losing part or all of his or her fees.

Another significant difference between litigation funding and traditional financing is that there are no monthly payments. While mortgages, auto and personal loans, and credit cards and other revolving credit arrangements require a monthly payment on the principal and interest, there are NO monthly payments with lawsuit funding. The risk premium on the advance simply accumulates, and the total due-the original advance plus the accumulated risk premium-is repaid in one payment by the attorney from the proceeds of the settlement.

Even in the worst possible outcome-the case is lost-the plaintiff is not on the hook for the money advanced to him or her. Lawsuit funding from LawMax is structured so the advance only needs to be repaid if and when a case is won or settled out of court. This creates a unique situation in which the plaintiff is only obliged to repay the funds advanced to him or her when, and if, he has the funds to do so!

Article Source: http://www.ArticleBlast.com