Lawsuit or pre-settlement cash advance loan is a type of non-recourse short-term credit. As soon as plaintiff lodges a suit in the court, the lending company examines the lawsuit, researches its possibilities for success, borrows the plaintiff a cash advance loan and guarantees that it will pay some part of money for the court’s judgment. Lawsuit cash advances are named non-recourse, because they are not real loans, but some type of advance payment, which the lending company gets back at the end of the lawsuit.
It may happen that the lawsuit process may fail. Then the plaintiff doesn’t have to repay money to the lender. If the amount of the advance loan is bigger than the sum after the court judgment, the plaintiff must pay the rest. The plaintiff is to pay just a part of the sum that he receives after the court verdict, even when it is less than the lawsuit cash advance loan.
The amount of cash advance that can be received from the lawsuit lending company varies depending on the type of lawsuit, success possibilities and the lending company itself. With regards to the above stated reasons, a lawsuit company may provide a loan, which can amount from $500 up to $25,000. However there are several cases, recorded in lending history, when a finance firm has offered a cash advance loan for $100,000.
Lawsuit lending companies usually provide cash advances in such situations, when it seems that plaintiff will receive more money in comparison with the amount given by a company. These companies commonly return the sum of cash advance, after a judge has made a verdict. The repaid money is called a flat fee. Moreover, a plaintiff should pay another fee every month, before a lawsuit is settled.
Plaintiffs usually borrow cash advances to pay for the rent, development of business or medical bills.