Disclaimer: Consumer legal fundings and advances are not loans under applicable financing laws. Rockpoint’s products are non-recourse, meaning if you don’t win your case, you don’t have to pay us back. Receiving financial support in connection with a legal case is typically (and oftentimes incorrectly) referred to as a “lawsuit loan” or “loan.” Therefore, for the ease of search references, these terms may be used in this context to refer to our funding products, but we maintain our separateness from consumer loan products in all legal aspects.
The post-settlement loans for plaintiffs available through Rockpoint Legal Funding can provide the lifeline you need when caught in the limbo of seeking compensation in a lawsuit. Although studies have shown that the median settlement amount in personal injury cases is just over $30,000, those awarded such a large sum can’t expect to collect compensation immediately, as it usually takes months to materialize.
Plaintiff funding allows you to cover everything from medical and everyday expenses to legal fees. You can also utilize lawsuit financing to continue to take legal action in your case if you plan to file an appeal.
This legal funding isn’t the only option plaintiffs have when they need financial assistance during lawsuits. However, it does stack up nicely with your other options and emerges as the superior choice once you compare them. Below, learn more about whether it may be right for you.
Post-Settlement Loans
Post-settlement loans, like the ones Rockpoint Legal Funding offers, are also known as lawsuit loans or lawsuit cash advances. You can collect one after you’re awarded a settlement or judgment in a lawsuit.
Rockpoint will immediately provide a percentage of your settlement or judgment amount in exchange for a percentage when it arrives. You won’t need to make monthly payments to satisfy the terms of this loan or face high interest rates each month. This provides post-settlement loans with a decided advantage over all the other options found here.
Applying for post-settlement loans through Rockpoint is easy. You may receive the cash you need within just two hours in some cases.
These loans are also considered non-recourse. In other words, if the terms of your lawsuit change for any reason and you don’t receive a settlement or judgment, you aren’t responsible for repaying Rockpoint.
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Personal Loans
Personal loans are extremely popular in the U.S. Two years ago, Americans owed about $146 billion in personal loans. Today, that number has risen to $232 billion.
Like the post-settlement loans Rockpoint Legal Funding offers, personal loans are easy to apply for. You can also access the money you need almost as soon as you’re approved for a personal loan.
However, personal loans often come with high interest rates attached. The average interest rate for one is 11.48%, up from 9.38% just a few years ago.
You’ll also have to repay personal loans regardless of the outcome of your lawsuit. Unlike post-settlement funding from Rockpoint, they aren’t non-recourse loans, so you can’t sidestep them if you end up losing your case in court.
401(k) Loans
Over one-third of working-age Americans have 401(k) retirement accounts. The average 401(k) contains anywhere from $82,503 (people in their 20s) to $569,093 (people in their 60s).
If you’ve put a lot of money into your 401(k), you might consider taking out a 401(k) loan when you need legal funding. You can remove money from your 401(k) and repay it when you receive a settlement or judgment in your lawsuit.
Sounds simple enough, right? The problem is that if you decide not to repay a 401(k) loan, you won’t have as much money as you could have when you reach retirement age. The Internal Revenue Service also warns that you might face additional taxes on unpaid 401(k) loans.
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Loans From Family Members or Friends
Do you have family members or friends who are well off enough to float you a lawsuit loan when you need it? This seems like another simple way to score the cash you need fast.
But think about this: A recent survey showed that about one-third of Americans borrowed money from family or friends in the past year. These people owe others about $184 billion.
A separate survey also suggested that almost half of these family or friend transactions end badly for people. Many close relationships have been ruined because family members and friends have borrowed money from one another.
You may not think borrowing from a family member or a friend will impact your relationship. But if your lawsuit doesn’t pan out the way you believe it will, you might not have the money to repay them. This could create a tense situation for you and a family member or friend.
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Credit Cards
The average American already has about $8,700 in credit card debt. Whether you have credit card debt or not, why not use a credit card as a form of litigation finance when filing a lawsuit?
This is among the worst ideas you can have when looking through the legal funding options for plaintiffs. Credit cards tend to have astronomically high interest rates. They can make it impossible for people to pay down their balances.
Taking on too much credit card debt can also hurt your credit score. You might struggle to qualify for a mortgage, a car loan, or other big-ticket items when you have too much credit card debt listed on your credit report. You shouldn’t rely on credit cards to cover any costs you face during a lawsuit.
Find Out Why the Legal Funding Rockpoint Provides Is the Right Option for Plaintiffs
Many of the legal funding options for plaintiffs listed here have major downsides. The post-settlement loan that Rockpoint Legal Funding can offer is one of the few with more pros than cons.
Read more about the connection between litigation funding and debt to see how it can help you avoid accumulating debt during legal proceedings. Contact us at (855) 542-8992 for additional information on our pre- and post-settlement litigation loans.
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Presettlement Legal Funding.