For injured clients who can’t work and are unable to pay their bills, the last thing they often expect is to be able to successfully secure funding to hold them over until their case settles. After all, what lender would loan money to someone with little or no cash reserves, a potentially declining credit score and who may be out of work because of an injury? Fortunately, the criteria for approving plaintiff funding is much different from the criteria used to secure a loan.
Plaintiff funding companies are typically interested in a few simple issues, all related to the client’s case.
- Liability – The injured party’s case must show clear liability by the defendant.
- Damages – The defendant must have incurred damages from the incident such as medical expenses, property damage or loss of wages.
- Ability to Pay – The defendant or their insurance company must have the financial ability to pay damages upon completion of the case.
Not a Loan. The reason why the criteria for funding is so straightforward is that plaintiff funding is not a loan. It is funding secured by the proceeds of the eventual settlement or case award. No credit check or proof of income is necessary. The injured party and family do not have to worry about defaulting or paying back the advance. This is true even if they lose the case. The funding company assumes all the risk.
Because the funding company must assume case risk, not every case will qualify for funding. Hence, it is best if the plaintiff’s attorney works with the funding company to determine whether plaintiff funding is a viable option for clients on case-by-case basis.