When you are pursuing a civil case in hopes of recovering damages for injury, property damage, or other expenses, you may be facing mounting bills while you wait for a settlement or judgment. You cannot do much to speed your case along, and your payment even after you reach a settlement or receive a judgment can take time. A pre-settlement company may be able to offer you relief by giving you an advance of or loan against your coming settlement award. Unlike a traditional loan, the pre-settlement company does not look at your credit score. Instead, it will examine your case and make a decision about whether or not to work with you based on your likelihood of winning. For this reason, many argue that pre-settlement funding is not a loan.
Check American Legal Financial Association Membership
Under Georgia law, pre-settlement companies do not have a rate cap. This means that they are, for the most part, unregulated. The American Legal Financial Association, an organization that various legal funding companies can join, has a code of conduct which members are required to follow. This code includes, among other things, a requirement to negotiate with clients whose awards are lower than anticipated or have faced some other unexpected financial hardship.
Read the Fine Print
Although all pre-settlement companies will give you an advance on your settlement if they approve your case, their terms will vary widely. Some require that you repay only the amount advanced or loaned. Others charge interest, which may be charged at different rates and frequencies. Still others cap the amount to be paid back at the amount awarded in your case, while others will charge the loan amount plus interest no matter how much you won in your suit, and still others will take all of your award, regardless of amount. Finally, some do not require that you pay back anything if you lose your case. Knowing the exact terms being offered can help you to make the best decision for your situation.
Better Business Bureau Ratings
Companies registered with the Better Business Bureau (BBB) are generally legitimate business. Even if they are registered, though, check to make sure that their ratings are positive. The BBB also has a Scam Tracker feature which you can check for any pre-settlement companies you are considering to ensure that they are legitimate.
It is important to get all of your questions answered before signing an agreement. While your questions may vary, be sure that you understand:
- Interest rates and calculations, also called funding fees
- Application fees
- Repayment terms
If at any point the answers seem odd to you or you are uncomfortable with the answers, do not hesitate to ask more questions or move on to another company.
Contact Us Today
If you are considering pre-settlement financing, contact Capital Financing today and let us help you ensure that you are getting taken care of correctly and not being taken advantage of.