Legal financing, mostly known as litigation Financing can be known in some areas as lawsuit financing. It is a mechanism whereby law firms or even individuals fund their legal costs by the assistance of a third party company. It’s likely to be used by plaintiffs and its benefit to the financed party is that it does not need to repay the amount should they lose the case. The funding firm receives a proportion of the shares only if the court verdict is won but the funding has to occur if it’s 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 Types of funding in Legal financing and you have to know which one you are settling for and its consequences. It can either be direct plaintiff financing whereby you’re given the cash to run the day to day legal expenses or legal cost financing whereby in settling the lawsuit costs, a check is sent to your attorney from time to time.
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Involve your lawyer.
Your attorney is a major determinant on your process of obtaining legal Financing since he wants to Answer several questions regarding the situation and filling of some paperwork hence The should let him Understand the facts along with your intention to get funding.
Look out for litigation 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 firms you have chosen.
When you have finally decided on the business to source funds from, study About the company to find out whether it is qualified and pay attention on the complains. You could also visit their offices to find out its physical location.
Analyzing the potency of your case.
Consult your lawyer to find out if your case is strong enough to obtain financing and how necessary it is.
Taking into account the proceeds from winning the court judgement that will go into the payment of the lawyer and the legal funding company incorporating the interest, consider if it’s worth it. If there are other more economical options like sourcing your capital from household and Friends then settle for that.
Enquire all requirements and what it implies to get the funds.
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 extra services they offer and should they attract additional charges.
One can now confidently apply for the legal financing providing the necessary information through the right channels.
Read the contact thoroughly and understand before signing. If you concur With everything in it, you can the append your signature.
Depending On the station of receiving money, check out if you have gotten the amount.